10/05/2016

In the Federal Budget announced on the evening of 3 May 2016, the government announced an increase in the $80,000 tax threshold to help alleviate the effects of bracket creep. From 1 July 2017, the 37% tax rate will apply from a new threshold of $87,000.

So, here are some tables setting out the current rates for 2015/16 and the proposed new personal tax rates and thresholds for 2016-17 (including the 2% temporary budget deficit levy, which applies only to taxable incomes over $180,000 but excluding the 2% Medicare levy) and also what that means in terms of tax payable. As non-residents are taxed differently, we’ve also included tables showing the tax rates for foreign residents.

Personal income tax rates and thresholds

Australian Residents

 

 

2015-16

 

2016-17

 

Threshold

Rate

Threshold

Rate

1st Rate

$0-$18,200

0%

$0-$18.200

0%

2nd Rate

$18,201-$37,000

19%

$18,201-$37,000

19%

3rd Rate

$37,001-$80,000

32.5%

$37,000-$87,000

32.5%

4th Rate

$80,001-$180,000

37%

$87,001-$180,000

37%

5th Rate

$180,001

47%

$180,001

47%

             

With Medicare levy included, the top marginal rate is 49% through until 30 June 2017.

Tax rates and thresholds summarised

The current 2015-16 tax rates (including the 2% temporary budget deficit levy, but excluding the 2% Medicare levy) are as follows:

2015-16 income year

Taxable income ($)

Tax Payable ($)

0-18,200

Nil

18,201-37,000

Nil + 19% of excess over 18,200

37,001-80,000

3,572 + 32.5% of excess over 37,000

80,001-180,000

17,547 + 37% of excess over 80,000

180,001+

54,547 + 47% of excess over $180,000

The proposed rates for the 2016-17 year (including the 2% temporary budget deficit levy, but excluding the 2% Medicare levy) are:

2016-17 income year

Taxable income ($)

Tax Payable ($)

0 - 18,200

Nil

18,201 - 37,000

Nil + 19% of excess over 18,200

37,001 - 87,000

3,572 + 32.5% of excess over 37,000

87,001 - 180,000

19,822 + 37% of excess over 87,000

180,001+

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

Non-residents (foreign residents)

Taxpayers who are not Australian residents are taxed at different rates.

The current rates for non-residents (including the temporary budget deficit levy) for 2015-16 are:

2015-16 income year

Taxable income ($)

Tax Payable ($)

0-80,000

32.5%

80,001-180,000

26,000 + 37% of excess over 80,000

180,001+

63,000 + 47% of excess over $180,000

The proposed tax rates for non-residents (including the temporary deficit tax) for 2016-17 are:

2016-17 income year

Taxable income ($)

Tax Payable ($)

0-87,000

32.5%

87,001-180,000

28,275 + 37% of excess over 87,000

180,001+

62,685 + 47% of excess over $180,000