Budget Brief: Personal
As is always the case, the impact of the budget on people’s hip pocket has been consuming most of the media’s attention as people attempt to second guess the day to day impact of the budget changes. Below is a summary of the main changes together with some unresolved areas that currently appear to contain a rose amongst a lot of thorns.
What this means in practice is that an individual with taxable income of $300,000 will pay a levy (tax) of $2,400 being 2% on $120,000 ($300,000 - $180,000).
A number of other tax rates that are currently based on calculations that include the top personal tax rate will also be increased such as excess contributions tax and TFN withholding.
Note that these rates do not include the Medicare levy, currently 1.5%, but to rise to 2% from 1 July 2014. The effective top marginal rate would be 49% from 1 July 2014 to 30 June 2017.
Therefore the rose in all this is that the nil rate may in fact be increasing to $19,200 in 2015/16, however, the Government may yet weed this rose out.
If you have any questions in relation to the budget and how these change may impact you or your business please contact your relevant ESV engagement partner on 9283 1666.