The Turnbull Government recently announced a change in the tax threshold from July 1, 2016 that impacts on both individual taxpayers and employers.

For Individual Tax Payers

From 1 July, 2016 for individual taxpayers the marginal tax rate of 37 per cent will start at $87,000 rather than the current $80,000. Individual taxpayers with a taxable income of more than $80,000 will benefit from this threshold change.

The adjusted tax rates table for resident taxpayers is included below, with the changes in bold:

Updated tax rates for resident taxpayers:

Taxable IncomeTax on this income
0 – $18,200Nil
$18,201 – $37,00019c for each $1 over $18,200
$37,001 – $87,000$3,572 plus 32.5c for each $1 over $37,000
$87,001 – $180,000$19,822 plus 37c for each $1 over $87,000
$180,001 and over $54,232 plus 45c for each $1 over $180,000

For Employers

The changes made to the tax thresholds means that for employers the tax tables have changed for employees who earn over $80,000. New tax tables and payroll software updates will apply from 1 October 2016.

Although the threshold change is backdated to 1 July 2016, employers do not need to make any other adjustments or refunds as the ATO will refund any over-payment of tax when employees lodge their 2016-17 income tax return.

All employers, if they haven’t already, should contact their software provider for the relevant payroll software updates or download the latest tax table from the ATO website (   Please contact our office if you need any assistance with this update.