Tax Tag

13 May

Posted at 14:06h in News, Tax

A new working Australians tax offset (WATO) will be introduced to provide a permanent annual $250 tax offset from 1 July 2027 to all eligible Australian workers for their income derived from work (such as wages and salaries and the business income of sole traders).

The WATO will increase the effective tax-free threshold for income derived from work by nearly $1,800 to $19,985 (or up to $24,985 for workers eligible for the LITO. The Treasurer said this is the largest permanent increase in the effective tax-free threshold since 2012–2013. The offset will apply for income earned from work for the second half of 2027 and will automatically reduce workers’ tax liability for the 2027–2028 income year.

The WATO is in addition to the already-legislated tax cuts that apply from 1 July 2026 and 1 July 2027, and the previously-announced $1,000 instant tax deduction for work-related expenses from the 2026–2027 income year. The Government believes that the combined benefit to a worker on average earnings of the tax cuts, new tax offset and instant tax deduction will be up to $2,816 from 2027–2028 (or $54 per week).

This is only an announcement of what the Federal Government is planning to implement – it is not law yet and may change or not proceed subject to its debate and passage through Parliament.

29 Jun

Posted at 12:02h in News, Tax

With the election campaign finally over and a new government sworn in, many Australians will be wondering what a Labor government is likely to tackle over the next term. A helpful starting point is Labor’s election promises, which provide a useful indication of possible areas that will be targeted over the next few years.

One of the big tax policies that Labor took to the election was the party’s commitment to ensuring that multinationals pay their fair share of tax in Australia.

During the election campaign, Labor also promised to reduce the cost of child care by lifting the maximum child care subsidy rate to 90% for those with a first child in care and retaining the higher child care subsidy rates for second and additional children in care. For those with school-aged children, the promise of the increased child care subsidy will be extended to outside school hours care.

Labor also made announcements which will affect individuals and businesses, both big and small. These include more security for gig economy workers, making wage theft illegal, and training more apprentices.