Low Income Tax Offset

Australian Tax Office
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The Low Income Tax Offset in Australia

The Low Income Tax Offset (LITO) is a rebate calculated at the end of the tax year to ensure that people on a low taxable income pay little or no tax.

2013-2014

There is no Change to the Taxation system for the LITO, and the figures remain the same as last year 2012/13, with a maximum of a $445 rebate, with this reducing by 1.5 cents in the dollar, for every dollar of income over $37,000.

The result is that the LITO now cuts out at $66,667.

The final effect for 2012/13 is that no tax will be payable on incomes up to $20,542.

(The next scheduled change for this is in the 2015-2016 year, with another slight reduction. This will mean that no tax will be payable on incomes up to $20,979 in the 2015-16 year, subject to any further changes.)

Previous Years:

2012-2013

You are entitled to receive the offset if your taxable income is below $66,667.
The maximum value of $445 begins to be phased out at the reduced rate of 1.5 cents for each dollar of taxable income over $37,000 (the LITO threshold).
The final effect for 2012/13 is that no tax will be payable on incomes up to $20,542.

2011-2012

You are entitled to receive the offset if your taxable income is below $67,500
The maximum value of $1,500 begins to be phased out at the rate of 4.0 cents for each dollar of taxable income over $30,000.

2010-2011

The Low Income Tax Offset effectively means that those who earn under $16,000 in the year will pay no tax.

The base calculation for this is:
2010-11 Low Income Tax Offset

  • Incomes under $30,000 will be eligible for the full $1,500 LITO, this rebate reduces by 4 cents in every dollar that the income exceeds $30,000.
  • Annual Income of $16,000 or under will pay no tax.
  • This offset cuts out at an income of $67,500 in 2010-11

Those on low incomes, between $16,000 and $67,500 will therefore receive gradually reducing tax offset payments.

Details of this were given in the 2010 Australian Federal Budget www.aph.gov.au/budget/2010-11



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