The Government will be bringing forward income tax cuts in Tuesday’s Federal Budget, with millions of Australians set to receive thousands back in their hip pocket.
"Tax relief allows more Australians to keep more of what they earn," Treasurer Josh Frydenberg told Sky News today.
"It rewards effort, encourages the power of aspiration, but it also encourages and leads to greater economic activity as people with tax relief spend more."
Back in 2019, the Coalition Government flagged three stages of income tax cuts, with the first round delivering Aussies tax offsets of $1,080.
The second stage, which was scheduled for July 2022, would see the 19 per cent tax threshold increased from $41,000 to $45,000 and the 32.5 per cent threshold from $90,000 to $120,000.
The third stage, scheduled for July 2024, would see the 32.5 per cent tax threshold increased to include those earning as much as $200,000.
The Prime Minister all but confirmed the tax cuts last week, saying: “We’re delivering lower taxes for businesses and individuals. Australians are already benefiting from the tax cuts made in the last two budgets.”
There is some speculation the tax cuts could also be backdated to 1 July this year.
How much money will Aussies get back under the tax cuts?
For workers with a taxable income of $21,000, bringing forward the second stage of tax cuts would see them pocket $87.
Aussies earning between $22,000 and $30,000 would see them pocket $255.
Those with a taxable income of $40,000 would pocket $480, while those earning between $50,000 and $80,000 would pocket $1,080.
If you earn $90,000, you’ll pocket $1,215, and if you earn $100,000, you’ll save $1,665. Those earning between $120,000 and $200,000 will receive the largest break of $2,565.
While it’s unclear whether the Coalition will also speed up the third stage of the tax cuts, if they did, workers in the highest tax bracket could save up to $11,640 each year.
Also read: What we know about the Federal Budget so far
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