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*The above table does not include Medicare Levy or the effect of any Low Income Tax Offset (“LITO”). There are low income and other full or partial Medicare exemptions available. A Medicare Levy Surcharge may also be applicable and is applied on a progressive basis if eligible private health insurance cover is not maintained.

The 2022-23 financial year starts on 1 July 2022 and ends on 30 June 2023. The financial year for tax purposes for individuals starts on 1st July and ends on 30 June of the following year.

The basic tax scales are the same as the previous year, but the Low & Middle Income Tax Offset drops out which would effectively increase tax for lower income earners.

A subsequent Budget 2019 measure further expanded the 19% income ceiling to $45,000 from 1 July 2022. The Federal Budgets of March 2022, October 2022 and May 2023 made no changes to the tax rates or income thresholds.

The 2018 Budget announced a number of adjustments to the personal tax rates taking effect in the tax years from 1 July 2018 through to 1 July 2024.

Reflected in the above table are tax rate changes from the 2018 Budget for the 2 years from 1 July 2022 to 30 June 2024, which include an expansion of the 19% rate initially to $41,000, and lifting the 32.5% band ceiling to $120,000.

The modified rates lifted the 32.5% rate ceiling from $87,000 to $90,000 from 1 July 2018.

This was further modified by the 2020 Budget announcements to lift the 19% rate ceiling from $37,000 to $45,000, and the 32.5% tax bracket ceiling from $90,000 to $120,000.

What’s New in 2022-23?

• The LMITO ceased as of 30 June 2022, and so will not be reflected in 2022-23 tax return calculations. This will effectively increase tax for some people. There’s more about that at tax free thresholds. However the (‘new’) Low Income Tax Offset (LITO), valued at up to $700, remains.

• Removal of self education expenses $250 threshold (Sec 82A) The $250 threshold for claiming self education expenses as a work-related expense has been removed with effect from the 2022-23 year.

• Working From Home Expenses (Home Office) 2023 Claim Method The method for calculating deductions for working from home expenses has been changed with effect from 1 July 2022 and to apply for the 2023 financial year. The new fixed rate method allows you to claim 67 cents per working hour which covers internet, phone, electricity, gas, stationery and computer consumables You can also claim separately for depreciation, and it is no longer a requirement to have a home office set aside for work. Records of hours worked and evidence of expenses is required.

• The company tax loss carry-back temporary refundable tax offset is extended to include the 2022-23 year.

As part of an ongoing review the ATO has released draft policy dealing with the application of Sec 100A to trust profit distributions.

Sec 100A is an anti-tax avoidance provision which applies where an agreement allows one person to receive benefits from a trust, but another person is presently entitled and subject to tax.

This potentially catches common family and commercial arrangements under which trust profits are nominally distributed to one or more beneficiaries, possibly including a corporate beneficiary, leading to (incidentally or otherwise) an overall reduction of tax notwithstanding that the distributed funds are returned to the trust by some means.

As a penalty, tax under Sec 100A is applied at the highest marginal rate (currently 47% including medicare).