If you are an Australian resident for income tax purposes and you pay tax on your taxable income, you may be eligible for the low and middle-income tax offset if your taxable income is below certain thresholds.

You don’t need to complete a section in your tax return to get these tax offsets. If you are entitled to any offset, it is automatically added to your tax return. You will see the amount on your notice of assessment and will not receive the offset as a separate payment.

 

What is a tax offset?

A tax offset means you pay less tax on your taxable income (that is, your total income minus any deductions). This offset can reduce the tax you pay to zero. 

 

Low and middle-income tax offset

The low and middle-income tax offset amount is between $255 and $1,080.

The full offset is $1,080 per annum but you might not be entitled to the full $1,080. The base amount is $255 per annum.

This offset is available for the 2018–19, 2019–20 and 2020–21 income years.

If your taxable income is between $37,001 and $126,000, you will get some or all of the low and middle-income tax offset. This is in addition to the low-income tax offset.

The amount of offset you receive depends on your circumstances, such as your taxable income and how much tax you have paid.

The table and graph below show the amount of the offset you are entitled to depending on your taxable income.

Tax Offset