Tax Rates 2022-2023 Year (Residents)
The 2023 financial year in Australia starts on 1 July 2022 and ends on 30 June 2023. The financial year for tax purposes for individuals starts on 1st July and ends on 30 June of the following year.
The 2022-23 Tax Scale
The basic tax scales are the same as the previous year, but the Low & Middle Income Tax Offset drops out which would effectively increase tax for lower income earners.
|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 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. There were further amendments in 2019.
Reflected in the above table are tax rate changes from the 2018 Budget for the 2 years from 1 July 2022 to 30 June 2024, which include an expansion of the 19% rate initially to $41,000, and lifting the 32.5% band ceiling to $120,000.
A subsequent Budget 2019 measure further expanded the 19% income ceiling to $45,000 from 1 July 2022.
The Federal Budgets of March 2022, October 2022 and May 2023 made no changes to the tax rates or income thresholds.
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.
Low And Middle Income Tax Offset Ended
The LMITO ceased as of 30 June 2022, and so will not be reflected in 2022-23 tax return calculations. This will effectively increase tax for some people. There’s more about that at tax free thresholds.
However the (‘new’) Low Income Tax Offset (LITO), valued at up to $700, remains.
Removal of self education expenses $250 threshold (Sec 82A)
The $250 threshold for claiming self education expenses as a work-related expense has been removed with effect from the 2022-23 year.
See Treasury Laws Amendment (2022 Measures No. 2) Bill 2022 (Schedule 3)
Working From Home Expenses (Home Office) 2023 Claim Method
The method for calculating deductions for working from home expenses has been changed with effect from 1 July 2022 and to apply for the 2023 financial year.
The new fixed rate method allows you to claim 67 cents per working hour which covers internet, phone, electricity, gas, stationery and computer consumables
You can also claim separately for depreciation, and it is no longer a requirement to have a home office set aside for work.
Records of hours worked and evidence of expenses is required.
For more info and additional links see Home Office Expenses
2023 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 level for 2022-23 which is $24,276. 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 on lower levels of income is $700, 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.
Employee Share Schemes
From 1 July 2022 cessation of employment is removed as a taxing point for deferred tax schemes. Employer reporting obligations are adjusted to reflect the change.
See further: Employee Share Schemes
Digital Games Tax Offset
As part of the Budget 2021 and subsequent MYEFO the government announced a 30% per cent refundable tax offset to apply from 1 July 2022 for eligible businesses that spend a minimum of $500,000 on qualifying Australian games expenditure.
The tax offset is intended to provide an incentive for firms to attract digital talent to Australia.
See further info and links at Digital Games Tax Offset.
Super Guarantee Now 10.5%
In accordance with the legislated schedule of super guarantee increases, the rate increases to 10.5% from 1 July 2022.
From 1 July 2023, the rate increases to 11%.
Downsizer contributions from age 60
From 1 July 2022 downsizer contributions to eligible superfunds for contributors over the age of 60 will be permitted. The age limit was previously restricted to those over 65.
Removal of work test for under 75s
From 1 July 2022 and as announced in Budget 2021, the Work Test condition is removed for individuals aged 67 to 74 years in respect of non-concessional contributions.
$450 super guarantee threshold removed
Super Guarantee contributions will be extended to apply to any employee over the age of 18 regardless of salary level.
The existing exclusion of under-18 employees working less than 30 hours per week remains.
Professional Service Firms Profits and Part IVA
The Tax Office’s renewed set of policy documents governing the risk assessment and tax treatment of profits flowing through entities associated with professional service firms take effect from 1 July 2022.
The ATO’s basic concerns are outlined here.
Policy documents have been released which provide a methodology for practitioners to assess risk and, when appropriate, to incentivise a proactive response.
Policy documents include the following, with examples (direct links to ATO):
- PCG 2021/4 Allocation of professional firm profits – ATO compliance approach
- Assessing the risk: allocation of profit within professional firms – ATO
- TA 2013/3 Purported alienation of income through discretionary trust partners
Commentary on the policies has been published here. (publicaccountant.com.au)
Small Business 20% Deduction Boost For Skills, Training and Eligible Digital Technology Expenditure
An unlegislated LNP Coalition Budget 2022 measure has been picked up by the Labor government to be implemented on expenditure dating from 29 March 2022.
The measures provide an additional 20% tax deduction on eligible skills, training and digital technology expenditure.
Small businesses for these purposes are those with aggregated annual turnover of under $50 million.
The 20% deduction boost for skills and training will apply to 30 June 2024. For digital tech costs the deduction boost applies to 30 June 2023.
Further details and links to legislation and explanatory materials are here.
Small business instant asset write-offs reduced
Temporary Full Expensing Expires 30 June 2023, replaced by an Instant Asset writeoff of up to $20,000, limited to businesses with turnover under $10 million. More info here.
This page was last modified 2023-05-31