On Tuesday night the government announced the budget for 2020-21. There’s a number of changes, but we’ve broken down the all-important tax changes, and there is some good news in there for you.
There have been two major threshold changes:
- The 19% threshold has been increased to $45,000 (up from $37,000)
- The 32.5% threshold has been increased to $120,000 (up from $90,000)
That means if you’re earning $50,000 per year, you’ll be $1080 better off, or roughly $20 per week.
These changes were due take place in a couple of years, but instead have been backdated and are being brought forward to this financial year, meaning you should see your pay increase before Christmas.
The Low Income Offset has also increased to $700, up from $445, which will see again another small increase in your take home pay.
For those earning over $48,000 per year, there has been no change to the $1080 Low & Middle Income Tax Offset that was introduced last year.
The lower taxes are only part of the new budget. The budget also includes a JobMaker Plan, support for housing construction, infrastructure investment and business support - all great news for business owners.
The full budget overview is available online here…
Or if you need help understanding the effect of the budget, don’t hesitate to get in touch with your nearest ITP office.