Low and Middle Income Tax Offset

The Low and Middle Income Tax Offset (LMITO) is a tax offset introduced as part of the Budget 2018 measures to revise the personal income tax rates.

It applies in the years from 1 July 2018 to 30 June 2022.

Legislation for this measure was approved by parliament in June 2018.

Offset to be increased – Budget 2019 (subject to legislation)

Announced as part of the 2019 budget measures (2 April 2019) the LMITO base amount is to be increased from $200 to $255; the maximum amount will increase from $530 to $1080. Revised taxable income tests are also to be applied.

LMITO from 1 July 2018 (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

The LMITO applies in addition to the Low Income Tax Offset (LITO). The offset is paid in arrears, i.e. applied on an annual basis as part of the annual income tax assessment calculation.

LMITO 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

From 1 July 2022 both the LMITO and LITO will be replaced by a single low income tax offset (a new LITO). The calculation formula for the new offset is set out here.

 

 

This page was last modified 2019-04-03