What is the low income tax offset in Australia?

Low Income Tax Offset (LITO) in Australia

The Low Income Tax Offset (LITO) is a tax benefit that reduces the amount of tax you pay if you earn a low income. It's designed to help lower-income earners keep more of their money.

Current LITO Details (2023-24)

• Maximum offset: $645 per year
• Who qualifies: Australian residents for tax purposes earning less than $66,667
• How it works: The offset gradually reduces as your income increases above $37,500
• Automatic: The Australian Taxation Office (ATO) applies it automatically when processing your tax return—you don't need to claim it separately

Income Thresholds

The offset is calculated based on your taxable income:

• If you earn $37,500 or less: you get the full $645
• If you earn between $37,500 and $66,667: the offset reduces gradually
• If you earn more than $66,667: you don't qualify

Who Gets It

You're eligible if you:

• Are an Australian resident for tax purposes
• Have taxable income below the threshold
• Lodge a tax return (even if you don't need to)

The offset applies to employees, self-employed people, and others with taxable income.

Important Notes

LITO amounts can change each financial year. The government may adjust thresholds and maximum amounts. Always check the current year's rates before relying on specific figures.

If you're unsure whether you qualify or want to understand how it affects your specific situation, you can use the ATO's tax calculator or contact them directly.

ATO Low Income Tax Offset information

This is general information only. Check official sources before acting.