1. Personal income tax changes
1.1 Changes to personal income tax rates
The Government has announced that it will bring forward changes to the personal income tax rates
that were due to apply from 1 July 2022, so that these changes now apply from 1 July 2020 (i.e.,
from the 2021 income year). These changes involve:
- increasing the upper threshold of the 19% personal income tax bracket from $37,000 to $45,000;
and
- increasing the upper threshold of the 32.5% personal income tax bracket from $90,000 to $120,000.
These changes are illustrated in the following table (which excludes the Medicare Levy).
| Rate | Current (2019 to 2020) | Proposed (2021 – 2024)* |
| 0% | 0 – $18,200 | 0 – $18,200 |
| 19% | $18,201 – $37,000 | $18,201 – $45,000 |
| 32.5% | $37,001 – $90,000 | $45,001 – $120,000 |
| 37% | $90,001 – $180,000 | $120,001 – $180,000 |
| 45% | 180,001 + | $180,000+ |
* The Government advised that the personal income tax rate changes that have already been
legislated, effective from 1 July 2024 (i.e., from the 2025 income year), remain unchanged. These involve
abolishing the 37% personal income tax bracket, reducing the 32.5% personal income tax bracket to 30%,
and increasing the upper threshold of the reduced 30% tax bracket from $120,000 to $200,000.
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