Legislation was passed on 12 October 2016 which increases the middle tax bracket threshold from $80,000 to 87,000, retrospectively from 1 July 2016. The marginal tax rate of 37 percent now starts at $87,000 instead of $80,000. By pushing up the tax threshold on the middle tax bracket, average full-time wage earners will be kept on the lower rate for longer. This will stop around 500,000 taxpayers facing the 37 percent marginal tax rate this coming financial year.
Examples of the reduced amount of tax for the full year are shown below:
If you earn more than $80,000, your employer will reduce the amount of tax being withheld from your pay. You don’t have to do anything. Any extra tax you have paid before the change will be credited to you when you lodge your 2017 income tax return.
New tax tables and payroll software updates apply and the ATO Tax Withheld Calculator has also been updated The updated tax table is downloadable from the ATO Website