What are the 2013 tax rates and will I receive a larger refund this year?


I wrote about the 2013 tax rates back in June 2012 when they were announced after the May 2012 budget.


What are the 2013 tax rates?

Taxable Income

Marginal tax rate

Tax + Medicare Levy rate

$0 – $18,200



$18,201 – $37,000



$37,001 – $80,000



$80,001 – $180,000



Above $180,000



I have included the Medicare Levy rate of 1.5% where applicable to show the true marginal rate.


Increased tax free threshold

The tax free threshold has risen from $6,000 in 2012 to $18,200 in 2013. However what really matters is the amount you can earn without paying tax – I call this the tax free amount.


Increased tax free amount

The tax free amount was $16,000 in 2012 and has now risen to $20,542 in 2013.


Reduced low income tax offset

The government has reduced the low income tax offset from $1,500 in 2012 to $445 in 2013.


Do the changes in the 2013 year matter if I am earning $30,000 or above?

Yes and no.

Yes, the changes matter as they change your overall tax.

No, the changes don’t matter much because the net tax you will pay in 2013 will remain similar to 2012.


Although the increased threshold (from $6,000 to $18,200) would reduce tax overall, to balance this out the ATO has reduced the low income tax offset ($1,500 to $445) and increased the tax rate from 15% to 19% between $18,200 and $37,000.


Will I pay less tax in 2013?

Those earning between $30,000 and $66,667 should have $303 less tax to pay in 2013.

Above $80,000, the $303 gradually reduces to only $3 over the year for those earning above $180,000.

Those earning about $20,000 to $25,000 should have the largest reduction in tax (paying up to $700 less tax in 2013 than 2012).


Will I receive a larger tax refund in 2013?

Your tax refund depends on a number of factors, such as how much your employer has withheld from your salary and if you have any other income, deductions or credits.

Also, based on the 2013 tax rates, your employer will withhold less than 2012 given the lower tax rates.

With all things being equal in 2013 as compared to 2012, your refund might be the same or slightly larger than last year – however any changes to your circumstances will change your final refund or payment amount.

Posted in Tax
  • Name

    After the spouse tax offset and low income tax offset have been either reduced or deleted, I am aproximately $1000 worse off this financial year.

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