Australia’s tax system is complex. As an Australian resident, you must pay taxes to the Australian Tax Office (ATO). The government just introduced a seven-year Personal Income Tax Plan. It aims to provide tax relief for Australian residents with lower personal income tax rates. This blog provides an outline of what can be expected, but it is always advisable to speak to a tax accountant for more personalised advice.

Personal Income Tax Rates for 2021-2022

The 2022 fiscal year begins on 1st July 2021 and ends on 30th June 2022. Here are the Personal Income Tax Rates for Australian residents for 2021-2022: 

  • $180,001 and up: $51,667 + 45 cents for every dollar over $180,000
  • $120,001 to $180,000: $29,467 + 37 cents for each $1 beyond $120,000
  • $45,001 to $120,000: $5,092 + 32.5 cents for every $1 dollar over $45,000
  • $18,201 to $45,000: 19 cents for every $1 over $18,200
  • $0 to $18,200: No Income Tax

Medicare Levy 

A Medicare Levy (ML) is around 2% of the taxable income of Australian residents. Australian residents pay the levy on top of the tax they pay on their taxable income. If the taxable income lowers, the Medicare Levy may also be reduced. 

Medicare Levy Surcharge 

A Medicare Levy Surcharge (MLS) is an extra charge levied on the taxable income, family trust income amounts and total reportable fringe benefits of Australian residents. The base threshold is $180,000 for families and $90,000 for singles. High-income earners can take out private health insurance to offset MLS. 

How Do The 2022 Tax Rates Benefit You? 

The Australian government adjusted the individual tax rates for Australian residents due to COVID-19 to lower personal income tax rates for residents. 

Low Income Tax Offset (LITO) and Low and Middle-Income Tax Offset (LMITO) can save you money. By adjusting the individual tax rates for Australian residents, the government aims to create more jobs, reduce the burden on middle-income earners and boost GDP. 

You can claim further tax deductions based on your employment or career type. However, you can only claim tax deductions on work-related expenses, not personal ones. You must have a record proving your work-related expenses. 

Let The Professionals Help You 

Doing your tax return can seem like a burden. Perth Mobile Tax has a professional team of tax accountants who specialise in a wide range of tax-related solutions. We can assist in relieving the stress of the tax season and help you maximise your tax returns. Contact us today for the 2022 tax season.

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