Tax Rates 2019-2020 Year (Residents)

The 2019 financial year starts on 1 July 2019 and ends on 30 June 2020. The financial year for tax purposes for individuals starts on 1st July and ends on 30 June of the following year.

The 2018 Budget announced a number of adjustments to the personal tax rates taking effect in the tax years from 1 July 2018 through to 1 July 2024. The legislation is here.

The modified rates are reflected in the table below (32.5% ceiling lifted from $87,000 to $90,000) and apply for the 4 years from 1 July 2018 to 30 June 2022.

Tax scale 2019-20

Taxable IncomeTax On This Income
 0 to $18,200 Nil
 $18,201 to $37,000 19c for each $1 over $18,200
 $37,001 to $90,000 $3,572 plus 32.5c for each $1 over $37,000
 $90,001 to $180,000 $20,797 plus 37c for each $1 over $90,000
 $180,001 and over $54,097 plus 45c for each $1 over $180,000

The above tables do not include Medicare Levy or the effect of the Low Income Tax Offset (“LITO”) or LMITO. Medicare Levy is applied on a progressive basis if eligible private health insurance cover is not maintained. There are low income and other full or partial Medicare exemptions available. A Medicare Levy Surcharge may also be applicable. A proposed increase in the basic medicare levy has been abandoned – see notes below.

What’s new in 2019-20?

See Budgets 2018 and 2019 for outlines of further measures.

Basic Medicare Levy

A 2017 budget measure providing for an increase in the basic medicare levy by 0.5% – to 2.5% of taxable income to apply from 1 July 2019 has been abandoned by the government.

Foreign residents’ capital gains tax – grandfathered properties come into the net

The 2017 budget measure to deny access to foreign and temporary tax residents to the CGT main residence exemption from 7:30PM (AEST) on 9 May 2017 excludes properties held prior to this date until 30 June 2019.

Low and Middle Income Tax Offset

A Budget 2019 announced measure increases the LMITO values from the 2018-19 year through to 2021-22. The LMITO base amount will increase from $200 to $255; the maximum amount will increase from $530 to $1080. Revised income tests also apply.

LMITO 2018-19 to 2021-22 (subject to legislation)

IncomeOffset
up to $37,000$255
$37,001 to $48,000$255 plus 7.5 cents for each dollar over $37,000
$48,001 to $90,000$1,080
$90,001 to $126,000$1,080 less 3 cents for each dollar over $90,000

As before, the LMITO will be paid in arrears by inclusion in the tax assessment upon tax return lodgement after the end of the financial year.

LMITO 2018-19 to 2021-22 (as currently legislated)

IncomeOffset
up to $37,000$200
$37,001 to $48,000$200 plus 3 cents for each dollar over $37,000
$48,001 to $90,000$530
$90,001 to $125,333$530 less 1.5 cents for each dollar over $90,000

Expansion of taxable payment reporting systems (Budget 2018):

The taxable payments reporting system has been extended from 1 July 2019 to include:

  • security providers and investigation services
  • road freight transport
  • computer system design and related services

The measures for the newly included industries will commence with effect from 1 July 2019, the first financial year report being due by 28 August 2020. Read more here – Taxable Payments Reporting.

‘Cash in hand’ wages not tax deductible  (Budget 2018):

For employer taxpayers – legislation has been approved to limit tax deductions for certain payments for personal services – e.g. wages etc – for which the PAYG withholding tax obligations have not been complied with.

The start date is 1 July 2019.  Read more here.

Extending GST to offshore sellers of hotel accommodation in Australia (Budget 2018):

From 1 July 2019 offshore sellers of hotel accommodation in Australia will be required to calculate their GST turnover in the same way as local sellers. (Currently offshore sellers of Australian hotel accommodation are exempt from including sales of hotel accommodation in their GST turnover).

Sales that occur before 1 July 2019 will not be subject to the measure even if the stay at the hotel occurs after this date.

The unanimous agreement of the States and Territories will be required for the enactment of legislation. See GST matters.

SMSF annual audit moving to 3-yearly cycle

A 2018 budget measure proposes a change to the annual requirement to 3-yearly from 1 July 2019 for SMSFs deemed to have a good compliance record. See SMSF Audits.

Taxing celebrities on income from their fame or image

In a measure which was announced as part of the 2018-19 Budget, the government plans to introduce rules to include all remuneration which is provided for the commercial exploitation of a person’s fame or image in the assessable income of the individual.

This is aimed at high profile individuals such as celebrities, sportspeople, internet personalities and entertainers who currently are able to divert income into arrangements which provide a better tax outcome than would be the case if the earnings were treated as income of the individual.

A consultation paper has been released for comment. The government is seeking to introduce the measures to take effect from 1 July 2019.

Super rules for older Australians

The Treasurer has announced some loosening of super contributions rules for older Australians:

  • From July 1, 2020 Australians aged 65 and 66 will be able to make voluntary superannuation contributions, both concessional and non-concessional, without meeting the Work Test. This will align the Work Test with the eligibility age for the Age Pension.
  • The age limit for spouse contributions will be increased from 69 to 74 years.
  • The age limit for access to the bring-forward arrangements be extended to those aged 65 and 66.

See further: Treasurer’s media release

 

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This page was last modified 2019-04-02