Australians are set to receive a major tax cut from next week to boost the country's economic recovery during the coronavirus pandemic.
The Federal Government revealed an early tax relief package during its budget announcement in October, which will be granted to over 11 million Australians.
Prime Minister Scott Morrison and Treasurer Josh Frydenberg said they hoped 'to get more money into the pockets of hard-working Australians as quickly as possible'.
The Federal Government (Josh Frydenberg and Scott Morrison pictured) revealed a tax relief package for 11 million Australians in October
Tax thresholds will be increased for the the 32.5 and 19 per cent tax brackets and additional tax offsets will be provided to low and middle income earners (Australian dollars pictured)
The tax cuts will increase the point where the top 32.5 per cent tax bracket kicks in from $90,000 to $120,000.
It will also increase the top threshold of the 19 per cent tax bracket from $37,000 to $45,000.
The Government has also provided 'additional targeted support to low and middle-income Australians' with low-income tax offsets increased from $445 to $700.
A one-off tax benefit of up to $1,080 will also be given to low-and middle-income earners with a salary between $37,001 and $126,000 for the 2021 financial year.
Australians earning a salary of $100,000 will see a weekly tax reduction of $29, while anyone earning $120,000 will see a reduction of $47 thanks to the tax cuts.
EARLY TAX RELIEF PACKAGE
* The top threshold of the 32.5 per cent tax bracket will be increased from $90,000 to $120,000.
* Top threshold of the 19 per cent tax bracket will be raised from $37,000 to $45,000.
* A one-off tax benefit of up to $1,080 will be given to low-and middle-income earners with a salary between $37,001 and $126,000.
* The low income tax offset will be increased from $445 to $700. Those earning up to $66,667 are eligible for all or part of the offset.
A worker earning $80,000 per year is expected to pay $1,080 less in tax.
'The tax relief package, for both individuals and business, is part of our COVID-19 Economic Recovery Plan for Australia to create jobs, rebuild our economy and secure Australia's future,' a statement from the Treasurer and Prime Minister said.
'Getting money into the pockets of Australians will give them more to spend at their local shops helping to create more jobs.'
Providing tax relief to businesses is also intended to help 'keep businesses afloat' and to 'grow and hire more people'.
The Treasurer estimated the tax relief package would create 100,000 jobs by the end of 2021-22.
It is also set to boost Australia's GDP by around $6 billion in 2020‑21 and $19 billion in 2021-22.
Ryan Felsman, a senior economist at CommSec, said the tax cuts and low interest rates would help to increase retail spending.
'Record low interest rates, tax cuts and solid welfare spending have all boosted Aussie incomes,' he explained.
'It is hoped that those armed with savings will be primed for some 'retail therapy' in the lead up to big online sales events later this month, ahead of the all-important Christmas trading period.'
The tax relief comes after Australia's unemployment rate skyrocketed to 6.9 per cent in September.
Australia's unemployment rate sat at just 5.5 per cent before the pandemic.
It is hoped the tax cuts will put more money into the pockets of Australians and encourage them to create more jobs by spending at local businesses (MyGov account pictured)