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Tax Rates For 2014-2015 Year (Residents)

The basic tax scale and marginal rates for the 2014-15 financial year have been in place for three financial years, however from 1 July 2014 the top marginal tax rate of 45% for incomes over $180,000 has the 2% Temporary Budget Repair Levy added to it (for 3 years from 1 July 2014).

Additionally in 2014-15, the basic medicare levy percentage rate has been increased by 0.5% (to 2%).

For Higher Income Earners – this means a possible 50.5% tax rate:  For taxpayers with income over $180,000 the maximum Medicare Levy Surcharge that applies for those without sufficient health insurance is 1.5%. Effectively, the combination of a top marginal tax rate of 47% plus 2% basic medicare levy plus 1.5% medicare levy surcharge adds to a maximum possible marginal rate of 50.5% for higher income earners.

The 2014-15 financial year starts on 1 July 2014 and ends on 30 June 2015. The financial year for tax purposes for individuals starts on 1st July and ends on 30 June of the following year.

** Temporary Budget Repair Levy on Higher Income Earners

The Federal Budget 2014-15 measures include a Temporary Budget Repair Levy of 2% applicable on taxable incomes in excess $180,000. This in effect increases the highest marginal tax rate in the table below from 45% to 47% (before Medicare), and takes effect for 3 years from 1 July 2014 until 30 June 2017. The relevant legislation is now law and is incorporated in the table below.

Personal Tax Rates 2014-15

** (including the Temporary Budget Repair Levy)

Taxable income Tax on this income*
0 – $18,200 Nil
$18,201 – $37,000 19c for each $1 over $18,200
$37,001 – $80,000 $3,572 plus 32.5c for each $1 over $37,000
$80,001 – $180,000 $17,547 plus 37c for each $1 over $80,000
**$180,001 and over $54,547 plus 47c ** for each $1 over $180,000
*The above table does not include Medicare Levy or the effect of any Low Income Tax Offset (“LITO”).

Medicare Levy is applied on a progressive basis at the additional rate of 2.0% plus the Medicare Levy Surcharge if eligible private health insurance cover is not maintained. There are low income and other full or partial Medicare exemptions available.  

The Low Income Tax Offset (“LITO”) full amount is $445 reducing by 1.5 cents in the dollar, for every dollar of taxable income over $37,000 such that it cuts out at $66,667. The effect is that no tax is payable up to an income of $20,542.

Tax changes for 2014-15

(not exhaustive)

  • In a measure associated with the funding of the National Disability Insurance Scheme, an increase in the basic Medicare Levy by 0.5% from 1.5% to 2% applies from 1 July 2014.
  • The increase in basic medicare levy has caused flow-on adjustments to the FBT rate, grossing-up percentages and other calculations. See Fringe Benefits Tax and see also Reportable Fringe Benefits
  • As per tax table above – a Temporary Budget Repair Levy of 2% has been added to the top marginal tax rate which becomes 47% applicable to incomes over $180,000 from 1 July 2014.
  • Continuation of the phase-out of the medical expenses tax offset, with a claim in 2014-15 only available if a valid claim was made in 2013-14 – see details here: medical expenses tax offset
  • The Federal Budget 2014-15 presented to parliament on 13 May 2014 contains a proposal  to remove the dependent spouse tax offset (which had already been subject to phase-out measures based on date of birth) for all taxpayers with effect from 1 July 2014. (Note however that the Invalid and Carer tax offset continues to be available).
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This page was last modified on 13 May 2015