Low Income Tax Offset

“LITO” calculation formulae for the tax years to 30 June 2022*

The Low Income Tax “Offset” is an amount subtracted from tax payable. If the calculated LITO offset is greater than your tax payable, the excess is not refundable, and it also can’t be used to offset Medicare Levy.

The LITO is for lower income earners, and does not have to be specifically claimed, because the Tax Office automatically calculates your entitlement in your tax assessment.  (The LITO and LMITO calculations are provided for in the free spreadsheet annual tax calculator).

Under Budget 2018 proposals

  • from 1 July 2018 to 30 June 2022 the new LMITO  applies in addition to LITO
  • From 1 July 2022 both LITO and LMITO will be replaced by a single LITO

Under Budget 2019 proposals

  • the maximum value of  LMITO originally set at $530 was increased to $1080, and
  • the new LITO from 1 July 2022 (maximum value) increased from $645 to $700.

LITO calculation table from 1 July 2012 to 30 June 2022*

Taxable IncomeLITO Formula (to 30 June 2022)*
$0 – $37,000$445
$37,001 – $66,667$445 – [(taxable income – $37,000) x 1.5%]
$66,667 +Nil

LMITO calculation table from 1 July 2018 to 30 June 2022*

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


* LITO calculation from 1 July 2022

Taxable IncomeLITO Formula from 1 July 2022
$0 to $37,500$700
$37,501 to $45,000$700 – [(taxable income – $37,500) x 5%]
$45,001 to $66,667$325 – [(taxable income -$45,000 x 1.5%]
over $66,667nil

Legislation for all of these measures has now been passed.

2011-2012 Low Income Tax Offset

For 2011-12 the full offset is $1,500, with a withdrawal rate of 4 cents per dollar of income over $30,000, such that it cuts out at $67,500.

LITO calculation table 1 July 2011 to 30 June 2012

Taxable IncomeLITO Offset 2011-12
0 – $30,000$1,500
$30,001 – $67,500$1,500 – [(taxable income – $30,000) x 4%]
$67,500 +Nil

2010-2011 Low Income Tax Offset

From 1 July 2010 the full offset is $1,500, with a withdrawal rate of 4 cents per dollar of income over $30,000, such that it cuts out at $67,500.

LITO calculation table 1 July 2010 to 30 June 2011

Taxable IncomeLITO Offset 2010-11
0 – $30,000$1,500
$30,001 – $67,500$1,500 – [(taxable income – $30,000) x 4%]
$67,500 +Nil

 

2009-2010 Low Income Tax Offset

For 2009-10 the full offset is $1,350 with a withdrawal rate of 4 cents per dollar of income over $30,000, such that it cuts out at $63,750.

LITO calculation table 1 July 2009 to 30 June 2010

Taxable IncomeLITO Offset 2009-10
0 – $30,000$1,350
$30,001 – $63,750$1,350 – [(taxable income – $30,000) x 4%]
$63,750 +Nil

See also

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This page was last modified 2019-07-04