The Government has introduced a three-year Temporary Budget Repair Levy on individuals who have a taxable income in excess of $180,000.
The levy is payable at a rate of 2 per cent of each dollar of a taxpayer’s annual taxable income over $180,000. No levy is payable where the taxpayer has a taxable income of $180,000 or less.
The levy will apply from 1 July 2014 and apply to the 2014-15, 2015-16 and 2016-17 financial years. It is expected to raise around $3 billion.
The introduction of this levy means that individuals with taxable incomes exceeding $180,000, and who are liable for the Medicare levy surcharge, will be subject to the top marginal rate of 50.5 per cent of income.
Non residents are also expected to bear the burden of the Temporary Budget Repair Levy.