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