When YOUR $1,080 in tax relief should start arriving in your bank account

Australians should start receiving tax cuts of up to $1,080 during the next few days.

In the Budget, Treasurer Josh Frydenberg extended low and middle-income tax offsets for 10million people earning up to $126,000.

This will see 4.6million Australians earning between $48,000 and $90,000 receive $1,080 as another 1.8million people earning $37,000 to $48,000 get back $255.

Those earning between $37,000 and $48,000 and between $90,000 and $126,000 will get a smaller amount depending on their salary.

The new financial year started on July 1 which means tax cuts should start arriving next week.

Tax agent H&R Block’s director of tax communications Mark Chapman said the Australian Taxation Office was likely to start paying out refunds on July 16. 

‘The ATO says that it won’t start processing 2020–21 tax returns until 7 July 2021 and doesn’t expect to start paying refunds until 16 July 2021 – so if you’re an early lodger, you might have to wait a bit,’ he told Daily Mail Australia.

‘Ordinarily, the ATO says that it aims to process the majority of electronically lodged tax returns within 12 business days but by and large most returns are processed quite a bit faster than that – often within five days.’ 

A spokeswoman for the Australian Taxation Office said most online returns were processed within a fortnight.

In the Budget, Treasurer Josh Frydenberg extended low and middle-income tax offsets for those earning up to $126,000

‘Those who lodge through our online myTax service, can generally expect to have their refund processed in less than two weeks,’ she told Daily Mail Australia.

‘It is important to note that the amount of any refund will differ for everyone depending on the individual circumstances and how much tax has been paid.’ 

The low and middle-income tax offsets were extended for another year in the May Budget at a cost of $7.8billion, providing relief of between $255 and $1,080.

‘People don’t have to do anything different to claim the offset,’ the tax office spokeswoman said.

‘We will work it out when they lodge their tax return.’

Last year’s October Budget provided low and middle-income tax offsets for those earning up to $126,000 and this was continued in the May 2021 Budget.

Both sets of tax relief measures will see an Australian earning $90,000 pay $7,020 less tax over the four years from 2018 to 2022. Those earning between $60,000 and $80,000 will pay $6,480 less compared to 2017 tax settings.

Stage two tax cuts that in the 2019 Budget were earmarked for July 2022 were fast tracked to 2020. 

High-income earners are getting big tax cuts from July 1, 2024 as the 37 per cent tax bracket is abolished and a new 30 per cent tax bracket is created for individuals earning between $45,000 and $200,000.

The number of tax brackets is also being trimmed from five to four for the first time since 1984 as part of the stage three tax cuts announced in 2019.