Taxpayers with an individual taxable income less than $126,000 will now be entitled to some of the low and middle income tax offset.

Understanding the low and middle income tax offset

  • The maximum offset is $1,080 per annum. The base amount, which applies for incomes up to $37,000, is $255 per annum.
  • The amount you receive depends on your income and how much tax you’ve paid throughout the year. It doesn’t mean that you will automatically get an extra $1,080 in your tax return.

You don’t need to do anything different to claim the low and middle income tax offset – just lodge your individual tax return and we’ll automatically process any offsets you are entitled to.

Employers don’t need to change how much they withhold.

This offset is separate from the Small business income tax offset which can reduce the tax you pay by up to $1,000. We work this out for you from information you report in your tax return.

An offset is not an automatic refund

It’s important to remember that an offset is not a refund. The offset reduces the amount of tax you pay on your taxable income. Depending on how much tax you paid throughout the year, the offset may result in a larger refund or smaller debt.

For more information Read more.