Tax cuts: How much will you save based on your salary?

The vast majority of Aussies will save $1080 through the tax changes but this quickly climbs to $2565 depending on your income.

Australians will pocket up to $2565-a-year in savings through the slashing of personal income tax brought forward by the Federal Government.

With Australia officially in its first recession in 29 years, Treasurer Josh Frydenberg says proposed tax cuts could be brought forward.

Speaking with the ABC on Thursday morning, the Treasurer hinted at bringing forward personal income tax cuts in the vicinity of $158 billion for Australians.

The cuts were slated for mid-2022. “(The cuts) are one issue that we’re considering, because we did legislate the tax cuts after the last election,” Mr Frydenberg said. “They were in three stages. And more money into people’s pockets means more spending, and more spending means more jobs.”

The third stage of the cuts with a tax rate of 32.5 per cent to the vast majority of workers were expected to be applied from 2024 but Mr Frydenberg revealed in July these would be brought forward to 2022. But that could now be brought forward to this financial year.

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The significant savings kick in for those earning between $50,000 and $90,000, who will have their total annual tax reduced by $1080.

Those with a taxable income between $90,000 and $100,000 will be reduced by $1215 and those earning between $100,000 and $120,000 save $1665.

From here the cuts increase to $2565 for Aussies earning between $120,000 and $200,000.

“There are three stages to those legislated income tax cuts and, you know, the benefit was very clear,” Mr Frydenberg said in July.

“We’re creating one big tax bracket between $45,000 and $200,000 where people pay a marginal rate of no more than 30 cents in the dollar.

“So we are looking at that issue and the timing of those tax cuts because we want to boost aggregate demand, boost consumption, put more money into people’s pockets and that is one way to do it.”

The revelation comes after the treasurer said the six week lockdown of Victoria from midnight night following the recent surge in coronavirus cases will cost the economy $1 billion a week.

“When I made a statement to the parliament in May I talked about the economic cost of a lockdown being about $4 billion dollars a week, and given that Victoria is about a quarter of the national economy, then you’re talking about an impact of around a billion dollars a week for the Victorian economy alone, which is very significant,” he told The Australian said.