Income Tax Cuts Calculator - Australia
Calculate the impact of Australia's Stage 3 tax cuts from the Federal Budget 2020/21 on your take-home pay. Compare old vs. new tax rates.
Tax Savings Summary
Take-Home Pay
Tax Rate Information
Understanding Australia's Stage 3 Tax Cuts
Australia's Stage 3 tax cuts, introduced in the Federal Budget 2020/21, are designed to provide tax relief to middle-income earners. These cuts reduce the 32.5% marginal tax rate and adjust income thresholds.
Stage 3 Tax Cuts Overview
Key Changes
- 32.5% marginal rate reduced to 30%
- $45,000 to $200,000 bracket widened
- $200,000 threshold maintained
- Implemented from 1 July 2024
Who Benefits
- Income earners $45,001 to $200,000
- Middle-income households
- Working families
- Small business owners
Australian Tax Rates - Before vs After
| Income Range | Before Stage 3 | After Stage 3 | Change |
|---|---|---|---|
| $0 - $18,200 | 0% | 0% | No change |
| $18,201 - $45,000 | 19% | 19% | No change |
| $45,001 - $120,000 | 32.5% | 30% | -2.5% |
| $120,001 - $180,000 | 32.5% | 30% | -2.5% |
| $180,001 - $200,000 | 37% | 30% | -7% |
| $200,001+ | 37% | 37% | No change |
Medicare Levy
The Medicare Levy is a 2% tax on taxable income to fund Australia's public healthcare system. There are thresholds and exemptions based on income and family situation.
Medicare Levy Thresholds (2024)
Singles
No levy if income = $24,276
Reduced levy $24,277 - $30,837
Families
No levy if income = $40,523
Reduced levy $40,524 - $51,252
Additional 1% surcharge for high-income earners without private health insurance
Tax Cuts by Income Level
| Annual Income | Annual Tax Saving | Weekly Saving | Fortnightly Saving |
|---|---|---|---|
| $50,000 | $325 | $6.25 | $12.50 |
| $70,000 | $1,355 | $26.06 | $52.12 |
| $90,000 | $2,385 | $45.87 | $91.73 |
| $120,000 | $3,415 | $65.67 | $131.35 |
| $150,000 | $4,445 | $85.48 | $170.96 |
Impact on Different Groups
Working Families
Average family saves $2,000-$3,000 annually
More disposable income
Reduced cost of living pressure
Small Businesses
Lower tax burden on owners
More funds for reinvestment
Improved cash flow
Higher Earners
Significant savings in $180k-$200k bracket
Reduced effective tax rate
Maintained progressivity
Comparison with Other Countries
| Country | Top Marginal Rate | Recent Tax Changes |
|---|---|---|
| Australia | 37% | Stage 3 cuts: 32.5% ? 30% |
| Canada | 33% | Recent bracket adjustments |
| UK | 45% | Threshold increases |
| US | 37% | Inflation adjustments |
Key Takeaways
- Stage 3 tax cuts reduce the 32.5% marginal rate to 30% for incomes $45,001-$200,000
- Taxpayers in the $180,001-$200,000 bracket see their rate drop from 37% to 30%
- Average tax savings range from $325 to $4,445 annually depending on income
- Changes take effect from 1 July 2024
- Medicare Levy remains at 2% with income thresholds
- Tax cuts benefit middle-income earners and working families
- Australia maintains a progressive tax system with seven brackets
- Tax cuts are designed to stimulate economic growth and reduce cost of living pressures