Tax cuts pass Parliament: Use our calculator to find out how much cash you’ll get back

Millions of Aussies are wealthier after Labor caved in on the Coalition’s income tax package, which has officially passed Parliament. Use our calculator to find out how much money you will get back.

Millions of Australians will start to see extra cash flow into their pockets in the coming weeks after the Coalition’s income tax package officially passed Parliament.

The move came after Opposition Leader Anthony Albanese confirmed Labor would back Scott Morrison’s full tax cuts package if its amendments to split the government’s bill failed.

Mr Albanese said Labor would not stand in the way of tax cuts, due to the current state of the economy.

“We do not want the circumstances where, in an economy that struggles, people do not get a tax benefit … the economy needs that (stimulus),” he told reporters.

Low and middle-income earners can expect up to $1080 extra in their wallets once the Australian Taxation Office has processed their latest return.

Those earning between $40,000 and up to $126,000 as a single income earner will receive a tax offset of up to $1080, while higher-income earners will receive larger tax cuts from 2024/25.

This is when those paying the income tax rate of 32.5 per cent will have their rate reduced to 30 per cent.

This is for Australians earning between $45,000 and under $200,000.

Millions of Aussies will be reaping the rewards from the latest round of tax cuts

PwC chief economist Jeremy Thorpe said “a majority of Australians are winners” from the latest package of tax cuts.

“Some will earn more than others,” he said.

“Get your tax return in quick, because you will get paid quicker and that will help stimulate the economy which is one of the logics behind this.”

PwC calculations found a single person earning the average income of $80,000 would be $7355 better off by 2024-25, while a double-income household earning $150,000 would be $14,460 better off.

Tax cuts will leave millions of Australians with thousands of dollars extra up until 2024-25.

Mr Thorpe said the Reserve Bank of Australia was “really worried about the economy”, resulting in the double cash rate cut in the past two months and the government rolling out the tax cuts.

“They are trying to put money into people’s pockets so they go and spend,” he said.

Australians would receive the tax offsets in their next three tax returns they file for the 2018/19, 2019/20 and 2020/21 financial years, and further benefit would be felt through income tax cuts during the year.

This depends on a person’s tax rate and income threshold.

H & R Block director of tax communications Mark Chapman said as soon as Australians lodged their 2018-19 financial year tax return they could reap the financial benefits.

“The sooner you lodge, the sooner you will get the tax offset from the government — the ATO will start paying the first refunds from last financial year probably in about one week’s time,” he said.

“Anybody lodging will get that offset straight away; they won’t need to do anything else, it will be processed immediately by the ATO.”

@sophieelsworth

Single income — cumulative 2019-20 to 2024-25

$0 $0

$40,000 $3120

$60,000 $6855

$80,000 $7355

$100,000 $9155

$125,000 $9655

$150,000 $12,075

$200,000 $17,175

$250,000 $17,175

Source: Pricewaterhouse Coopers.

Single income

In 2024-25 amount better off annually compared to June 30, 2019

$0 $0

$40,000 $580

$60,000 $1455

$80,000 $1955

$100,000 $3040

$125,000 $3040

$150,000 $6540

$200,000 $11,640

$250,000 $11,640

Source: Pricewaterhouse Coopers.

Double income 50/50 — cumulative 2019-20 to 2024-25

$40,000 $0

$60,000 $3060

$80,000 $6240

$100,000 $13,210

$125,000 $13,386

$150,000 $14,460

$200,000 $18,230

$250,000 $20,830

Source: Pricewaterhouse Coopers.

Double income 50/50

In 2024-25 amount better off annually compared to June 30, 2019

$40,000 $0

$60,000 $510

$80,000 $510

$100,000 $2410

$125,000 $3036

$150,000 $3660

$200,000 $6080

$250,000 $9580

Source: Pricewaterhouse Coopers

Originally published as Tax cuts pass Parliament: Use our calculator to find out how much cash you’ll get back