Many Australians earning less than $126,000 a year will be taking home less pay within the next few months as an extended tax offset from the government comes to an end.
Last year, Treasurer Josh Frydenberg announced the $1080 tax offset for low and middle income earners who earn between $48,000 and $90,000 would be extended into the 2020-21 budget.
The tax offset was extended into order to provide a much-needed boost to the economy and to help thousands of workers who were struggling due to the COVID-19 pandemic.
But now, that offset is set to come to an end in the coming financial year, meaning millions of Aussies will be seeing an increase in their overall tax.
This means 3.4 million people will be $1080 a year worse off while 7 million will be taking home less pay, according to analysis conducted by the Bankwest Curtin Economics Research Centre for The Age and The Sydney Morning Herald.
Even after the promised tax cuts in the 2024-25 financial year many people will be worse off.
For example, a person earning $80,000 will take home a net income of $63,013 this year but next year that is set to fall to $61,933. This will increase to $62,808 in 2024-25 when the new tax cuts kick-in.
In comparison, a person on $250,000 will pay more than $9000 less in tax in the 2024-25 financial year than they did in 2020-21.