Tax Rates 2020-2021 Year (Residents)

The 2021 financial year starts on 1 July 2020 and ends on 30 June 2021. 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.

This tax table reflects the currently legislated rates. However please note that future tax rates are subject to change at any time according to changes in government policy.

Taxable Income Tax 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  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.

For a free downloadable spreadsheet tax calculator see here.

Foreign residents’ capital gains tax 

The 2017 budget measure to deny access of foreign tax residents to the CGT main residence exemption from 7:30PM (AEST) on 9 May 2017 excluding properties held prior to this date until 30 June 2020.

Temporary residents who are Australian tax residents are not affected by the change.

As the legislation became law on 12 December 2019, affected taxpayers will, if necessary, need to lodge or seek amendments for relevant tax returns back to 2016-17. The ATO has advised that late interest and other penalties will be reduced, provided the taxpayer seeks to comply “within a reasonable timeframe”。

There are limited exclusions from the rules for certain life events occurring within 6 years of becoming a foreign resident.

See further information here.

Super rules for older Australians

The Treasurer has announced some loosening of super contributions rules for older Australians, with the changes are intended to have effect from the 2020-21 financial year.

  • 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.  Regulations are now in effect.

Coronavirus Response

The Coronavirus response announced and legislated beginning in March 2020 and subsequently include a number of measures which extend into 2020-21 year.

For an overview of all the measures see: Coronavirus response measures.

 

This page was last modified 2020-07-21