Australian Tax Cuts Explained: How to Receive Your Australian Refund
The Australian Federal Government has announced an additional $7.8 billion in tax cuts for the 2021-22 financial year, which will benefit more than 10 million taxpayers.
The tax changes that took effect on July 1 will primarily benefit low-income earners and small businesses.
Many Australians will receive a larger tax refund this year than they did last year because tax cuts imply they might save a significant amount of money returned.
However, this benefit is not automatic and you will have to file a tax return to claim it.
Who is eligible for the tax break?
10 million Australians or more are likely to get a $1080 bonus for individuals, and $2160 for dual-income couples as a result of tax cuts announced last year as the pandemic raged. Our average Australian tax refund is AU$2600
All taxpayers with income up to $126,000 are eligible for the low and middle-income tax relief. Depending on your income, you may be eligible for a different amount.
All you have to do now is file your Australia tax return for 2020-21, and the Australian Tax Office will handle the rest.
Tax cuts explained: How to know if you’re due relief from Australia
This tax relief will be provided as part of a taxpayer's annual tax return, where the taxpayer will effectively receive an extra tax refund.
How much you receive depends on how much you make, as individuals who earn more pay more income tax as a percentage.
You will receive $255 if your earnings are less than $37,000. The tax credit will gradually climb to $1080 if your income is between $37,000 and $48,000.
You'll get a maximum of $1080 if you earn between $48,000 and $90,000. If you make more than $90,000, the offset gradually fades away, eventually disappearing after $126,000.
The entire value of the tax cuts varies depending on your income, but it looks like this.
Retaining the Low and Middle Income Tax Offset (for 2020–21 and 2021–22 only), but increasing it from $455 to a maximum of $700.
Also raising the upper threshold for the 19% tax bracket from $37,000 to $45,000, changing the 32.5% tax bracket from $37,001–$90,000 to $45,001–$120,000, and raising the lower threshold for the 37% tax bracket from $90,001 to $120,001.
|
Relevant income for the |
New Low Income Tax Offset amount |
|
$37,500 or less |
$700 |
|
$37,501 – $45,000 |
$700, less 5% of income above $37,500 |
|
$45,001 – $66,667 |
$325, less 1.5% of income above $45,000 |
In addition, Australian residents with annual taxable income of up to $126,000 are eligible for the Low and Middle Income Tax Offset (LMITO) during the 2018–19 to 2021–22 financial years.
For the 2018–19 to 2021–22 fiscal years, some taxpayers may be eligible for both the LMITO and the LITO.The amount of LMITO you pay will be determined by your income, as shown in the table below:
|
Relevant income for the |
Low and Middle Income Tax Offset amount |
|
$37,000 or less |
$255 |
|
$37,001 – $48,000 |
$255, plus 7.5% of income exceeding $37,000 (up to a maximum benefit of $1,080) |
|
$48,001 – $90,000 |
$1,080 (maximum) |
|
$90,001 – $126,000 |
$1,080, less 3% of income above $90,000 |
To receive your tax refund, all you need to do is lodge your tax return as normal.
Who can help me file my Australian tax return and get my refund?
You can lodge your tax return with a trusted agent like Taxback. Our tax experts will take the burden of the paperwork, save you time and stress, and will make sure that you will get your maximum Australian tax refund.
Our average Australian tax refund is AU$2600
Why choose Taxback?
- We have 20+ years of experience, and last year we submitted more than 1 million tax returns for our customers all over the world
- Our tax experts will ensure you avail of every expense and relief you're entitled to
- We'll transfer your maximum legal Australian tax refund straight to your bank account anywhere in the world
- It's a convenient online service. We do the work. You get the cash!
- Got tax questions? Our Live Chat team are on hand 24/7 to answer you
The average tax refund Down Under is AU$2600
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