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, and is in addition to the Low Income Tax Offset.

Legislation for this measure was approved by parliament in June 2018, and was increased by the Budget 2019 legislation passed on 4 July 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 

Income Offset
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, which means it doesn’t turn up until you get your tax assessment after the end of the financial year.

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 2019-07-04