With the Australian Federal Budget announced last night, it can be overwhelming to make sense of the changes. We have broken down to what you need to know below:
Stage 2 Tax Cuts have been brought forward and backdated to 1 July 2020 (originally legislated to kick-in in two years’ time). The widely expected income tax cuts are to boost the economy – allowing Australians to have more of their own money to spend on what matters to them.
Personal income tax cut changes:
- The top threshold of the 19 per cent personal income tax bracket increased from $37,000 to $45,000
- The top threshold of the 32.5 per cent personal income tax bracket increased from $90,000 to $120,000
The $1080 low and middle income tax offset will be retained for the current financial year. The measure is set to impact 11.6 million taxpayers at a cost of $17.8 billion.
The budget makes no changes to the March 28 end date of the JobKeeper wage subsidy.
The ‘JobMaker Hiring Credit’ will partially subsidise the wages of young employees who are hired from Wednesday 7 October, but there are some conditions employers and employees will have to meet.
Employers will be able to claim $200 each week for every employee hired after Wednesday aged between 16 and 29, and $100 each week for every employee aged between 30 and 35.
Employees will also need to:
- Have been on JobSeeker, Youth Allowance or the Parenting Payment for at least one of the past three months
- Begin working at the claiming business between October 7, 2020 and October 6, 2021
- Work an average of at least 20 hours a week over the reporting period
The cost of the scheme will be $4 billion, with Treasurer Josh Frydenberg saying it will target youth unemployment.
PAYMENTS COMING FOR PENSIONERS
The Government will offer two more tax-free payments of $250 to pensioners and others on government support. Instalments to roll out in November with a second instalment early next year.
BUSINESSES ENCOURAGED TO INVEST
The Government will offer ‘temporary full expensing’ will be offered to businesses to encourage them to invest. Businesses that make new investments will be able to write off the entire cost in one year, rather than depreciating the asset over several years.
The scheme will be available instantly to all businesses with a turnover of less than $5 billion each year.
As always, if you have any questions or are chasing support – please don’t hesitate to get in touch with us. Phone us on 4638 5300 or click here. We look forward to hearing from you!