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.

The LMITO applies in addition to the Low Income Tax Offset (LITO)

The LMITO will be available subject to taxable income tests as follows:

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

The offset is intended to be paid in arrears, i.e. applied on an annual basis as part of the annual income tax assessment.

From 1 July 2022 both the LMITO and LITO will be replaced by a single low income tax offset of up to $645. The calculation formula for the new offset is set out here.

 

 

This page was last modified 2018-06-27