Income TaxSep 1, 2025
What tax offsets are available for low and middle income earners in 2024-25?
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AI-Assisted Answer
For the 2024-25 financial year, the main tax offset available for lower income earners is the Low Income Tax Offset (LITO). The Low and Middle Income Tax Offset (LMITO) ended after the 2021-22 financial year and is no longer available.
Low Income Tax Offset (LITO):
The LITO provides a tax reduction of up to A$700 for individuals with a taxable income of A$37,500 or less. It phases out as follows:
| Taxable Income | Offset Amount |
|---|---|
| A$0 - A$37,500 | A$700 |
| A$37,501 - A$45,000 | A$700 minus 5 cents per dollar over A$37,500 |
| A$45,001 - A$66,667 | A$325 minus 1.5 cents per dollar over A$45,000 |
| Over A$66,667 | Nil |
Key points about the LITO:
- It is a non-refundable offset, meaning it can reduce your tax to zero but will not result in a refund on its own
- It is automatically applied by the ATO when your tax return is assessed
- You do not need to claim it separately
- Combined with the tax-free threshold, the LITO means that individuals earning up to approximately A$21,884 effectively pay no income tax
Other offsets you may be eligible for include the Senior Australians and Pensioners Tax Offset (SAPTO), which provides up to A$2,230 for singles or A$1,602 each for couples, and the Australian Super Income Stream Tax Offset for those receiving super income streams.
tax-offsetslow-incomeLITO2024-25australia
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Disclaimer: This information is for general educational purposes and is not professional tax advice. Tax situations vary. Consult a qualified tax professional for advice specific to your circumstances.