Australians will see extra money in their pay packets starting this week with the stage three tax cuts taking effect from Monday.
The reworked version of the cuts, which provide more money to those on low and middle incomes, were included in the federal budget, along with billions in .
The tax cut will be worth around $1,929 a year to those earning $90,000.
But this money won't be delivered as one payment, unlike the Low and Middle Income Income Tax Offset, which saw tax refunds increased by around $1000 in previous years.
Treasurer Jim Chalmers delivers the 2024/25 Budget statement in the House of Representatives at Parliament House in Canberra on Tuesday, May 14, 2024. Source: AAP / LUKAS COCH
"It'll be a smaller amount — where you will see it every week or every month (whenever you receive your pay packet) as an effective pay rise from paying lower tax," he said.
"For example, somebody on $60,000 a year will see a weekly lift in their take home pay of about $23. And somebody on $120,000 will see something like $52 per week.
"It's more of a modest trend lift in people's incomes, rather than a big lump sum payment."
A household with a combined income of around $130,000 where one partner earns $80,000 and the other $50,000, will receive around $50 a week.
To calculate the effective rise in your pay packet, use our interactive or check the table below.
McMenamin said these tax cuts had been expected for years and should not impact inflation.
"[They] won't affect how economists and policymakers think about the outlook for the Australian economy," he said.
The , and Australians on payments such as the age and disability support pension, carers payment, parental payment and family tax benefit will receive small increases to Centrelink payments when routine indexation kicks in.
Other budget measures to help with cost of living pressures were also announced, including energy bill relief for all Australians.
Stage 3 tax cuts and how they will impact people's pay packets.
Help with electricity bills
All Australian households will receive , while around one million small businesses will receive $325.
This will be delivered in quarterly instalments and will appear as a direct credit on power bills.
State governments have also announced their own measures. Those in Queensland for example, will receive a total of $1300 in energy rebates.
The previous federal energy bill relief payments were only targeted to those on income support, seniors and family tax benefit holders.
Rent assistance
The maximum rates of Commonwealth Rent Assistance will be lifted by an extra 10 per cent, which will see payments increase by around $70 a fortnight.
It comes after the government lifted the maximum amount of the rent assistance subsidy by 15 per cent last year. This supplement is provided to those on lower incomes.
Nuisance tariffs
Treasurer Jim Chalmers announced earlier this year that tariffs would be scrapped on nearly 500 consumer items including fridges and washing machines from 1 July.
This will reduce the import costs of these products and should make the items cheaper.
Additional reporting by Rashida Yosufzai.
