10 million Australians will take hits to their take home pay next financial year amidst cost of living crisis

stressed woman doing taxes australia

Tax cuts introduced in the 2018-2019 financial year are being axed, with the biggest impact to be felt by middle-income earners. Those earning less than $126,000 per year are set to cop the majority of this.

Though middle income earners will feel the burn the most, the removal of the existing tax offset will impact all taxpayers earning between $45,000 and $200,000.

This will look like, on average, $600 less in tax refunds per taxpayer and a big difference in take home earnings come the 2023-2024 financial year. 

The average person earning $50,000 per year will be receiving a 3.4% tax cut (roughly $29 per week). This changes to a 2.1% tax cut for those earning below $90,000.

With tax time fast approaching (you can start filing at the beginning of July), it’s the last of your tax returns that will include the current offset. It’s also an important time to develop a strategy for tackling the rising cost of living and further cash rate hikes, with less cash in your pocket at the end of the month.

Since less money after tax compounds the impact of rising rates, increasing the sting of mortgage repayments or record-high rental costs, you may want to build up some security. One option may be to set some money aside in a short term deposit or a high interest savings account. Both products have seen rates benefit from cash rate rises.

If you’re interested in stashing some cash, take a look at our Best Term Deposits and Best Savings Accounts.

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Last updated 24 November 2024 Important disclosures
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    Deposit at least $20 each month and make 5 Visa Debit transactions with a linked Glide account.

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