Federal Budget 2022: Will I get a tax cut?
More than 10 million Australian taxpayers will receive an additional $420 tax cut as part of a suite of Federal Budget measures aimed to reducing the cost of living.
From July 1, those earning up to $126,000 will receive a one-off tax offset of $420.
This one-off payment of $420 will be combined with the low- and middle-income tax offset (LMITO), meaning eligible earners will receive up to $1500 back for single-income households or up to $3000 back for a dual-income household.
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Will I get a tax cut? How much will I get back?
Your taxable income | How much you'll get back | How many Aussies will benefit? |
Up to $37,000 a year | Up to $675 | 1.8 million |
$37,001 to $48,000 | $675 to $1500 | 1.6 million |
$48,001 to $90,000 | $1,500 | 4.8 million |
$90,001 to $125,999 | $420 to $1500 | 1.9 million |
Taxpayers who earn $126,000 a year or more will not receive the $420 offset.
Treasurer Josh Frydenberg said the offset was a temporary way of helping Australians most vulnerable to the costs of inflation.
“The Government is introducing a new temporary, targeted and responsible cost of living package to take the pressure off household budgets,” Mr Frydenberg said.
“Individuals already receiving the low- and middle-income tax offset will now receive up to $1500 and couples up to $3000 from 1 July this year.
“This measure comes on top of the $40 billion in tax relief already provided by our Government since the start of the pandemic. Under the Coalition taxes for hard-working Australians will always be lower.”
The $420 tax offset is expected to cost the Federal Government some $4.1 billion through to 2023-2024.
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A family example
Steve and Lauren are a full-time working couple who live together in Sydney.
Steve is a high school teacher earning $87,000 a year and Lauren works for a non-profit government organisation earning $60,000 a year.
Both Steve and Lauren fall into the most populous tax bracket of between $48,001 and $90,000 a year.
Under the LMITO, both Steve and Lauren will receive $1080 in tax back.
But now with the additional $420 payment, both will receive $1500 back or $3000 as a household.
When they lodge their return, the pair will pay $840 less tax than they would have last year.
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MEET THE SAUNDERS: How a hypothetical family will benefit
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