The 2022/23 Federal Budget has a range of new measures for individuals and businesses.
Personal Income tax changes
Low and middle-income tax offset increased (‘LMITO’) + Cost of living tax offset
To help with the increased cost of living the Government has announced a one-off $420 ‘cost of living tax offset’ for the 2022 income year. This will effectively increase the existing LMITO with a maximum LMITO benefit of $1,500 for individuals and $3,000 for couples when they submit their 2022 income tax returns. The LMITO is not available from the 2023 income year.
| 2022 LMITO (current) | Plus cost of living tax offset | |
|---|---|---|
| $0 - $37,000 | $255 | $420 |
| $37,001 - $48,000 | $255 + 7.5% of excess over $37,000 | $420 |
| $48,001 - $90,000 | $1,080 | $420 |
| $90,001 - $125,999 | $1,080 + 3% of excess over $90,000 | $420 |
| $126,000+ | Nil | Nil |
Tax deductibility of COVID-19 test expenses
Costs incurred for taking a COVID-19 test to attend a place of work are tax-deductible for individuals from 1 July 2021. In making these costs tax-deductible, the Government will also ensure FBT will not be incurred by businesses where COVID-19 tests are provided to employees for this purpose.
Changes affecting business taxpayers
Skills and training boost
Small businesses will also have access to a new 20 per cent bonus deduction for eligible external training courses for upskilling employees. The Skills and Training Boost will apply to expenditure incurred from Budget night until 30 June 2024, providing $550 million in tax relief.
Technology investment boost
Small businesses with an annual turnover of less than $50 million will be able to deduct a bonus of 20 per cent of the cost of expenses and depreciating assets that support digital uptake. This includes portable payment devices, cyber security systems or subscriptions to cloud-based services. The boost will apply to any eligible expenditures of up to $100,000 per year, incurred from Budget night until 30 June 2023.