Federal Budget 2016-17 | Personal Income Tax Rates

By admin - May 4, 2016

The government has announced a change to personal income tax rates, increasing the 32.5% rate threshold to $87k.

The low income thresholds for the Medicare levy will also be increased.
From 1 July 2016, the following individual income tax rates* will apply:

Taxable income

Tax on this income

0 – $18,200


$18,201 – $37,000

19% of excess over $18,200

$37,001 – $87,000**

$3,572 plus 32.5% of excess over $37,000

$87,001 – $180,000

$19,822 plus 37% of excess over $87,000

$180,001 and over

$54,232 plus 47% of excess over $180,000

*Excluding 2% Medicare Levy, **As announced in 2016/17 Budget but not yet enacted

Importantly, the government has confirmed that the 2% Temporary Budget Repair Levy will expire at the end of the 2017 income year, returning the effective top marginal tax rate to 45%.

The government has also announced that there will be no increase for indexation to the income thresholds for the Medicare Levy Surcharge and the Private Health Insurance Rebate for a further three years to 1 July 2021.

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