Tax Rates 2021-2022 Year (Residents)
Tax Scale For Year Ended 30 June 2022
|Taxable Income||Tax On This Income|
|$0 to $18,200||Nil|
|$18,201 to $45,000||19c for each $1 over $18,200|
|$45,001 to $120,000||$5,092 plus 32.5c for each $1 over $45,000|
|$120,001 to $180,000||$29,467 plus 37c for each $1 over $120,000|
|$180,001 and over||$51,667 plus 45c for each $1 over $180,000|
The 2022 financial year in Australia starts on 1 July 2021 and ends on 30 June 2022. The financial year for tax purposes for individuals starts on 1st July and ends on 30 June of the following year.
This tax table reflects the last amended tax brackets from as at 6 October 2020. There were subsequently no further changes to the tax scale announced in the 2021 Budget, however the Low and Middle Income Tax Offset was extended for another year to include 2021-22.
The modified rates lifted the 32.5% rate ceiling from $87,000 to $90,000 from 1 July 2018.
This was further modified by Budget 2020 announcements to lift the 19% rate ceiling from $37,000 to $45,000, and the 32.5% tax bracket ceiling from $90,000 to $120,000.
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.
Key Tax & Super Measures From 1 July 2021
Source: Government Media Release 1 July 2021: “Key measures take effect to lower taxes and create jobs”
- The Low and Middle Income Tax Offset has been retained for another year until 30 June 2022. (Budget 2021 measure). The ending of LMITO on 30 June 2021 would otherwise have resulted in comparatively more tax being paid by those in the lower and middle income ranges in 2021-22. See LMITO and Income Tax Thresholds.
- A Budget 2022 measure has increased the LMITO offset by $420.
- The temporary full expensing of asset purchases available to businesses has been originally applying from 6 October 2020 until 30 June 2022 (eligible aggregated turnover up to $5 billion) has been extended by another year until 30 June 2023. See Depreciation Deductions
- The company tax loss carry-back temporary refundable tax offset is extended to include the 2022-23 year.
- The “small business” turnover threshold of $10 million is increased to $50 million, providing access to a number of concessionary measures.
- The tax rate for small and medium companies (aggregated turnover below $50 million) is reduced from 26% to 25% for the 2021-22 and subsequent years
- Deferred tax employee share scheme amendments to exclude cessation of employment as a taxing point take effect from 1 July 2022. See Employee Share Schemes.
Trust Distributions and Anti-avoidance (Sec 100A) measures 2021-22
As part of an ongoing review the ATO has released draft policy dealing with the application of Sec 100A to trust profit distributions.
Sec 100A is an anti tax avoidance provision which applies where an agreement allows one person to receive benefits from a trust, but another person is presently entitled and subject to tax.
This potentially catches common family and commercial arrangements under which trust profits are nominally distributed to one or more beneficiaries, possibly including a corporate beneficiary, leading to (incidentally or otherwise) an overall reduction of tax notwithstanding that the distributed funds are returned to the trust by some means.
As a penalty, tax under Sec 100A is applied at the highest marginal rate (currently 47% including medicare).
An outline of the ATO’s position is published on their website here.
Policy material published by the Tax Office includes the following:
- Draft Taxation Ruling TR 2022/D1 Income tax: sec 100A reimbursement agreements
- Draft Practical Compliance Guideline PCG 2022/D1 Section 100A reimbursement agreements – ATO compliance approach
- Taxpayer Alert TA 2022/1 Parents benefitting from the trust entitlement of their children over 18 years of age (contains examples).
Detailed commentary on the ATO’s guidance has been published here. (publicaccountant.com.au)
2022 Tax Calculator
* 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 2021-22 which is $23,365. 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 $1,375, 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.
Tax calculations for 2021-22 have been revised where applicable to include the effect of an increase by $420 in the maximum Low-Middle Income Tax Offset, as announced in Budget 2022 (March 29, 2022).
There were no other tax scale changes announced in the Budget.
Other measures starting from the 2021-22 year
See various measures announced in the Budget 2022 delivered on 29 March 2022. They include:
- Fuel excise halved for a period of 6 months from 30 March 2022.
- 20% tax deduction “boosts” for small business (annual turnover less than $50 million) on eligible training and technology expenditures.
- Retirees minimum pension draw-down rates remain at 50% of scale until 30 June 2023
- Primary producers carbon credits concessionary treatment has been expanded.
- Patent box measures expanded
- Expanded access to employee schemes
- Medicare levy lower income thresholds indexed
- Age care workers cash bonus
For further info and links, see Budget 2022.
Previously announced measures having effect in 2021-22 include:
- The small business tax offset goes from 13% to 16% for the 2021-22 and subsequent years. There is no change to the cap of $1,000.
- R&D tax offset reforms take effec.t including lifting the expenditure cap from $100 million to $150 million
- Tax relief for small brewers and distillers – see Media Release
- CGT removed from granny flats – from 1 July, CGT will not apply to the creation, variation or termination of formal written granny flat arrangements providing accommodation for older Australians or people with disabilities. See: CGT on Granny Flats Removed.
- Extension of the Junior Minerals Exploration Incentive (JMEI) by 4 years
- Extension of COVID-19 measure – the temporary 50% reduction of minimum pension drawdown rates to be extended to include the 2021-22 year. See drawdown rates.
- Release of an additional 30,000 places in the First Home Loan Deposit Scheme, the New Home Guarantee program, and the Family Home Guarantee.
- Annual performance test for super fund products, with members to be notified by 1 October 2021 if their product fails this test.
- Maximum allowable members of SMSF and APRA funds will increase from 4 to 6 members from 1 July 2021
- Other measures listed in the media release include continuing implementation of Hayne Royal Commission reforms, cutting cross-border red tape for tradies and skilled workers, reforms to the Franchising Code of Conduct, improving payment times for suppliers in government contract supply chains, further rollout of consumer rights of access to banking data and Introduction of licencing for debt management services.
This page was last modified 2022-07-12