The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Peter Costello

Peter Costello

Treasurer

11 March 1996 - 3 December 2007

of 13/05/2003

Download this document:
PDF PDF 97KB

PERSONAL INCOME TAX CUTS

What are the personal income tax changes?

  • From 1 July 2003, personal income tax thresholds will be increased as follows:

  • the 30 per cent threshold will be increased from $20,000 to $21,600;

    the 42 per cent threshold will be increased from $50,000 to $52,000; and

    the 47 per cent threshold will be increased from $60,000 to $62,500.

  • The Government will increase the low income tax offset to $235 per year, an increase of $85 per year. The threshold of income from which the low income tax offset begins to be reduced will also be increased from $20,700 to $21,600. Some offset will be able to be claimed by taxpayers with annual incomes up to $27,475.

How will the personal tax cuts affect taxpayers?

  • These changes mean that Australian taxpayers can keep a higher proportion of the earnings they receive after tax, providing improved incentives to pursue work, advancement and higher skills.

What are the tax cuts worth?

  • The estimated value of the tax cuts for Australian taxpayers on a range of annual incomes is attached to this fact sheet.

How will the tax cuts be delivered to taxpayers?

  • The increases in the personal income tax thresholds will be reflected in lower amounts of tax withheld from taxpayers' income.
  • The low income tax offset is claimed by taxpayers in their annual income tax return.
Further information
  • Further information about this and other Budget measures can be obtained on the Internet at http://www.budget.gov.au.
  • See also Fact Sheet: Personal Income Tax Cuts - Low Income Earners and Fact Sheet: Personal Income Tax Cuts - Senior Australians.
  • The Australian Taxation Office Personal Tax Infoline can be contacted on 13 28 61.

 

Personal income tax cuts - taxpayers with annual taxable income between $10,000 and $100,000

Table: Personal Income Tax Cuts - Estimated Annual Reductions