How this calculator works
Historical income year: 2020/21, Australian full-year resident adult. The comparison changes the resident rate thresholds and LITO parameters brought forward in the 2020 budget. LMITO is included in both scenarios at its 2020/21 settings. Offsets cannot reduce income tax below zero. Medicare levy, levy surcharge, HELP repayments and other offsets are excluded, so these are income-tax comparisons rather than total assessment or current-year tax.
Formula
Income tax = max(0, progressive resident tax - LITO - LMITO). Saving = tax using previous parameters - tax using 2020/21 parameters.
Worked example
At AUD 50,000 taxable income, previous gross tax is AUD 7,797 and revised gross tax is AUD 6,717. After applicable LITO and LMITO, the comparison is AUD 6,467 versus AUD 5,387, a saving of AUD 1,080.
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Frequently asked questions
Is this the current Australian tax calculator?
No. It specifically explains the historical 2020/21 Stage 2 changes.
Does it include Medicare levy?
No. Levy thresholds depend on separate personal circumstances and are excluded from both scenarios.
Why can the offset exceed the tax reduction shown?
Offsets are non-refundable here. They can only reduce the tax already calculated to zero.