Stage 3 Tax Cuts Summed Up
Alright, buckle up mates! The Aussie government is doing a little tax tango, shaking things up with the Stage 3 tax cuts. It's like a sequel to a blockbuster - more twists, more drama, more broken promises and more cash in your pocket come July 1, 2024.
So, what's the scoop? They're giving the lower-income earners a bigger slice of the tax-cut pie. If your taxable income is under $146,486, you're in for a treat. Take a humble $40,000 earner – they're scoring a cool $654 tax cut, while under the old plan, they were like the kid who got left out in musical chairs.
Middle-income warriors with a $100,000 income? They're getting an extra $804 in their piggy bank, making the tax cut game stronger than ever.
But, hold your kangaroos, high rollers! If you're pulling in $200,000, the tax cut joyride gets a bit toned down. Your expected $9,075 windfall is taking a detour to $4,529. Still good, but not exactly the tax cut party you had in mind.
Low-income champs, there's good news for you too! The Medicare Levy threshold is getting a facelift – you won't start shelling out until you hit $32,500, up from the old $26,000 mark.
Now, the government swears this tax-cut remix won't break the bank – it's all about balance. But hey, it comes with a price tag of around $1 billion extra over the next four years. Let's hope the money tree is in full bloom.
And here's the kicker – to make this tax-cut carnival happen, the government needs to hustle and get the nod from the indie and minor party crew in Parliament. It's like trying to organize a surprise party – fingers crossed everyone's on board!
See below for tables with comparison of taxable incomes before and after Stage 3 tax cuts.
So, there you have it, folks. The tax saga continues, and we'll see if the government can pull off this tax-cut magic trick by July 1, 2024. Popcorn, anyone? 🍿✨
Comparision of taxable income before and after Stage 3 tax cuts:
(Source: The Tax Institute)
2023-24 Tax Rates
|
Index |
Taxable income |
Cumulative tax liability |
Marginal tax rate |
|
1 |
$0 |
- |
0% |
|
2 |
$18,200 |
- |
19% |
|
3 |
$45,000 |
$5,092 |
32.50% |
|
4 |
$120,000 |
$29,467 |
37% |
|
5 |
$180,000 |
$51,667 |
45% |
Stage 3 tax rates
|
Index |
Taxable income |
Cumulative tax liability |
Marginal tax rate |
|
1 |
$0 |
- |
0% |
|
2 |
$18,200 |
- |
19% |
|
3 |
$45,000 |
$5,092 |
30.00% |
|
4 |
$200,000 |
$51,592 |
45% |
Tax Liability
|
Income |
2023-24 index |
2022-23 |
Stage 3 Index |
2024-25 |
Difference - with Stage 3 tax cuts |
Difference - with updated proposed Stage 3 tax cuts |
|
$40,000 |
2 |
$4,142 |
2 |
$4,142 |
- |
$654 |
|
$50,000 |
3 |
$6,717 |
3 |
$6,592 |
$125 |
$929 |
|
$60,000 |
3 |
$9,967 |
3 |
$9,592 |
$375 |
$1,179 |
|
$70,000 |
3 |
$13,217 |
3 |
$12,592 |
$625 |
$1,429 |
|
$80,000 |
3 |
$16,467 |
3 |
$15,592 |
$875 |
$1,679 |
|
$90,000 |
3 |
$19,717 |
3 |
$18,592 |
$1,125 |
$1,929 |
|
$100,000 |
3 |
$22,967 |
3 |
$21,592 |
$1,375 |
$2,179 |
|
$110,000 |
3 |
$26,217 |
3 |
$24,592 |
$1,625 |
$2,429 |
|
$120,000 |
4 |
$29,467 |
3 |
$27,592 |
$1,875 |
$2,679 |
|
$130,000 |
4 |
$33,167 |
3 |
$30,592 |
$2,575 |
$3,379 |
|
$140,000 |
4 |
$36,867 |
3 |
$33,592 |
$3,275 |
$3,729 |
|
$150,000 |
4 |
$40,567 |
3 |
$36,592 |
$3,975 |
$3,729 |
|
$160,000 |
4 |
$44,267 |
3 |
$39,592 |
$4,675 |
$3,729 |
|
$170,000 |
4 |
$47,967 |
3 |
$42,592 |
$5,375 |
$3,729 |
|
$180,000 |
5 |
$51,667 |
3 |
$45,592 |
$6,075 |
$3,729 |
|
$190,000 |
5 |
$56,167 |
3 |
$48,592 |
$7,575 |
$4,529 |
|
$200,000 |
5 |
$60,667 |
4 |
$51,592 |
$9,075 |
$4,529 |
|
$210,000 |
5 |
$65,167 |
4 |
$56,092 |
$9,075 |
$4,529 |
|
$220,000 |
5 |
$69,667 |
4 |
$60,592 |
$9,075 |
$4,529 |
|
$230,000 |
5 |
$74,167 |
4 |
$65,092 |
$9,075 |
$4,529 |
|
$240,000 |
5 |
$78,667 |
4 |
$69,592 |
$9,075 |
$4,529 |
|
$250,000 |
5 |
$83,167 |
4 |
$74,092 |
$9,075 |
$4,529 |
Key Assumptions
The income is the taxpayers assessable income, net of any deductions.
This model does not account for the Medicare Levy, Medicare Levy Surcharge or other tax offsets the taxpayer may be eligible to receive.
This model does not account for any HELP loan repayments the taxpayer may be required to make (if any).
Taxpayer is an Australian tax resident in both income years.
All numbers are rounded to the nearest dollar.
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As always, the above is general in nature, please discuss with your trusted advisor.