Newsletter; 2018/2019 Budget Update
Please find below a summary of the some of the more relevant budget announcements that affect taxation.
2019/2020 individual tax rates
Taxable income range Marginal tax rate
$ 0 - $18,200 0%
$ 18,201 - $37,000 19%
$ 37,001 - $90,000 32.5%
$ 90,001 - $180,000 37%
$180,001+ 45%
These rates exclude the 2% Medicare Levy.
The effective top personal marginal tax rate is 47% including the Medicare Levy.
Low and Middle Income Tax Offset increase
From 1 July 2018, it is proposed that the existing new tax offset is increased to $1,080:
Taxable income range Current Proposed
$ 0 - $37,000 = Up to $220 = Up to $255
$ 37,001 - $48,000 = $200 plus 3% of excess over $37,000 = $255 plus 7.5% of excess over $37,000
$ 48,001 - $90,000 = $530 = $1,080
$ 90,001 - $125,333/$126,000 = $530 less 1.5% of
excess over $90,000 = $1,080 less 3% of excess over $90,000
$125,334+/$126,001+ = $0 = $0
This offset applies in addition to the Low Income Tax Offset which is currently $445.
Small business asset deductions
From 12 May 2015 to 28 January 2019, small business entities (with a turnover of less than ten million dollars) are able to immediately write off each eligible business asset they buy costing less than $20,000 per asset.
From 29 January 2019, the threshold was increased to $25,000 (from $20,000).
From 2 April 2019 to 30 June 2020, the threshold will increase to $30,000 (from $25,000) and will be available to medium business entities (with a turnover between ten million dollars and fifty million dollars).
Employee superannuation
From 1 July 2019, the super guarantee rate will remain at 9.50%.
2019/2020 9.5%
2020/2021 9.5%
2021/2022 10.0%
2022/2023 10.5%
2023/2024 11.0%
2024/2025 11.5%
2025/2026 12.0%
Superannuation contribution restriction exemption
From 1 July 2020, the government will introduce an exemption to the “work test’ to allow all individuals aged 65 and 66 to make superannuation contributions. The work test requires a minimum of 40 hours worked in any 30 day period in the financial year for people aged 65 to 74.
Currently, from 1 July 2019, the government introduced an exemption to the “work test’ to allow all individuals aged between 64 to 75 with superannuation balances below $300,000 to make superannuation contributions in the first year that they do not meet the work test requirements.
Access to the bring-forward rules for those aged 65 & 66
From 1 July 2020, individuals aged 65 & 66 will be allowed to make up to three years of non-concessional contributions under the bring-forward rule.
Currently, those aged 65 or over cannot access the bring-forward rules.
Increasing the age limit for spouse contributions
From 1 July 2020, individuals up to and including the age of 74 will be able to receive spouse contributions (with those aged 65 or 66 no longer needing to meet the work test). Currently, those aged 70 and over cannot receive spouse contributions.
