Tax Rates 2019-2020 Year (Residents)

The 2019-20 tax rates remain unchanged from the preceding year, and for the following two years.

The current tax scale is the result of a number of tax scale adjustments set forth in the Budgets of 2018 and 2019.

For the 2 years to 2019-20 and for the 2 years following, the middle income 32.5% tax rate ceiling was lifted from $87,000 to $90,000.

The 2019-20 financial year starts on 1 July 2019 and ends on 30 June 2020.

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

tax calculator

The above tables do not include Medicare Levy or the effect of the Low Income Tax Offset (“LITO”) or LMITO.

There are low income and other full or partial Medicare exemptions available. A Medicare Levy Surcharge may also be applicable and is applied on a progressive basis if eligible private health insurance cover is not maintained.

A proposed increase in the basic medicare levy has been abandoned – see notes below.

What’s new in 2019-20?

Some of the more noteworthy changes affecting the 2019-20 year are set out below. Not a complete list, just highlights.

On this page:

Coronavirus stimulus and relief
Basic medicare levy
Low and middle income tax offset
Expansion of taxable payment reporting systems
‘Cash in hand’ wages not tax deductible
Taxing celebrities on income from their fame or image
Super rules for older Australians
Redundancy and early retirement concessions
Medical Expenses No Longer Claimable
Small and Medium Business Instant Asset Deductions
Bushfire Relief Payments Tax Exempt
Research and Development Incentives
Salary Sacrifice Integrity
Deductions for vacant land
Home Office Expenses – New Shortcut Rate of 80 cents

Australia’s Coronavirus Stimulus Package 2020

In March and April 2020 the Prime Minister and Treasurer announced a series of temporary assistance measures in response to the currently deteriorating economic conditions.

They include a substantial increase in the instant asset write-off capital purchase allowance for business along with other subsidies, and substantial one-off and temporary increases in benefits received by Job Seekers (formerly Newstart) and other benefits.

On 30 March 2020 the government released details of the $1,500 per fortnight JobKeeper payment for employees affected by the downturn. Payments are made by the Tax Office to employers who are then in turn responsible for passing on the wages to eligible employees.

A package of measures providing free child care was released on 2 April 2020.

See details of the Coronavirus Response Measures here.

See Budgets 2018 and 2019 for outlines of other measures taking effect in 2019-20.

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 was abandoned.

Low and Middle Income Tax Offset

A Budget 2019 measure increased 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. This legislation passed 4 July 2019.

LMITO 2018-19, 2019-20, 2020-21 and 2021-22

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
tax calculator

The LMITO will be paid in arrears by inclusion in the tax assessment upon tax return lodgment after the end of the financial year.

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.

Taxing celebrities on income from their fame or image

Announced as part of the 2018 Budget and to commence from 1 July 2019, the government intends to introduce rules to tax individuals on all their remuneration from the commercial exploitation of a their fame or image.

This is aimed at high profile individuals such as celebrities, sportspeople, internet personalities and entertainers who have been able to divert income into other structures to achieve a better outcome than if they were taxed as an individual.

A consultation paper has been released for comment. Draft guidlines providing a safe harbour and issued as PCG 2017/D11 were withdrawn on 24 August 2018.

Super rules for older Australians

Note: these changes are intended to have effect from 1 July 2020.

The Treasurer has announced a softening 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 media release and draft legislation.

Redundancy and early retirement tax concessions

In the 2018-19 MYEFO, the Government announced that from 1 July 2019 it would extend the concessional tax treatment of genuine redundancy and early retirement scheme payments to certain taxpayers under Age Pension qualifying age.

The purpose of the measures is to align access to the redundancy and early retirement tax concessions with the Age Pension qualifying age rather than the age-based limit of 65 years.

See Early Retirement Payments. This measure has been legislated – see Redundancy and early retirement.

Medical Expenses No Longer Claimable

The availability of a tax offset for medical expenses has been progressively wound down over recent years. From 1 July 2019 no more claims can be made.

For details, including the scope of allowable claims prior to the 2019-20 year see medical expenses tax offset.

Small and Medium Business Instant Asset Deductions

An accelerated depreciation rate has also been introduced.

Under Budget 2019 proposals, the instant asset deduction was expanded for the 2018-19 and 2019-20 years. The deduction allowance was increased for assets costing up to $30,000 (previously $20,000), and increased the qualifying business turnover ceiling to $50 million.

In March 2020, the Coronavirus government support initiatives further expanded the concessions:

  1. From 12 March 2020 the write off allowance is increased from $30,000 to $150,000 to apply until 30 June 2020, with the eligible business turnover ceiling increased from $50 million to $500 million.
  2. From 12 March 2020 accelerated depreciation is available for businesses with a turnover up to $500 million (not otherwise using the instant asset rules) to allow an additional deduction of 50% of the asset cost in the year of purchase, and with existing depreciation rules applying to the balance. This measure applies until 30 June 2021.

See more details here.

Bushfire Relief Payments Tax Exempt

Legislation has been passed to exempt Bushfires Disaster Relief Payments from tax. See Income on which you don’t pay tax.

Research and Development Incentives

Legislation is before parliament to adjust the R&D tax offset scheme, which would take effect from the 2019-20 financial year.

The overall effect of the changes is to reduce the value of the offsets somewhat, and to tie the offset values to amounts spent as a proportion of total expenses. See R&D Tax Incentives.

Salary Sacrifice Integrity

Legislation has been passed to ensure that an individual’s salary sacrifice contributions cannot be used in the calculation of an employer’s minimum superannuation guarantee obligations – currently 9.5% of Ordinary Time Earnings.

The meaning of Ordinary Time Earnings for super guarantee purposes has been expanded to include amounts which would be OTE, had they not been salary sacrificed into qualifying superannuation.

The amendments take effect for quarterly periods starting 1 January 2020.

See Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill 2019 and Super Guarantee.

Deductions for vacant land limited from 1 July 2019

With effect from 1 July 2019 deductions for expenses associated with holding vacant land are not allowed. Exceptions (including farmland) are detailed here: Deductions for vacant land

Home Office Expenses – ‘Shortcut’ Rate of 80 cents per hour

Claims commencing 1 March 2020 can (optionally) be calculated at the rate of 80 cents per hour worked from home.

This rate is designed to cover all costs, and the only records required to be kept are time records, showing the hours worked from home.

See further: Home Office Expenses

See also: Overview of key changes (ATO Tax Time 2020)

Tax Calculator

Tax Calculator 2020 (Resident Individual)

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* Calculator Notes: Calculations are estimates based on legislated tax rates. Rounding errors may be present in the calculated results. Medicare: For the purposes of estimation the calculator assumes a Medicare exemption up to the single income earner exemption level for 2019-20 which is $22,801. The Medicare percentage selection box is included should you wish to adjust the calculated Medicare percentage at higher levels of income. The current Medicare income exemption levels can be reviewed here. LITO: The full value of LITO + LMITO on lower levels of income is $955, however it is not refundable, and so the actual credit is limited to the amount of tax payable on lower levels of income. See LITO info here.

This page was last modified 2020-09-15