Low and Middle Income Tax Offset


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Australian Low and Middle Income Tax Offset (LMITO).

The Australian 2018 budget introduced the Low and Middle Income Tax Offset (LMITO) for the tax years 2018-19 through to 2021-22, to assist Low and Middle Income earners with a slightly lower income tax deduction.  This is in addition to the Low Income Tax Offset.

The LMITO is subject to the passage of legislation.

This is designed as temporary measure and will be replaced in 1 July 2022 by a new low income offset, which will replace both the LITO and LMITO.

The LMITO rebate calculation is:.

Taxable income of up to $37,000 will get a rebate of $200
Taxable income between $37,001 and $48,000 will get a rebate of $200 plus 3 cents for each dollar over $37,000
Taxable income between $48,001 and $90,000 will get a rebate of $530
Taxable income between $90,001 and $125,333 will get a rebate of $530 less 1.5 cents for each dollar over $90,000

Examples of LMITO Rebate for incomes between $37,000 and $48,000

$37,000 = rebate $ 200
$38,000 = ($200 plus (3% of $1,000 ie: $38,000 – $37,000) $30 = net rebate $ 230
$47,000 = ($200 plus (3% of $10,000 ie: $47,000 – $37,000) $300 = net rebate $ 500


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Examples of LMITO Rebate for incomes between $90,000 and $125,333

$90,000 = rebate $ 530
$100,000 = ($530 less (1.5% of $10,000 ie: $100,000 – $90,000) $150 = net rebate $ 380
$120,000 = ($530 less (1.5% of $30,000 ie: $120,000 – $90,000) $450 = net rebate $ 80
$125,000 = ($530 less (1.5% of $35,000 ie: $120,000 – $90,000) $525 = net rebate $ 5

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