Low & Middle Income Tax Offset (LMITO) Checker
Check your eligibility for the historical Low and Middle Income Tax Offset for the 2021-22 income year.
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LMITO Result (2021-22)
For the 2021-22 financial year, your taxable income of $60,000 made you eligible for an estimated Low and Middle Income Tax Offset of $1,500. This amount would have automatically reduced your tax payable upon lodging your tax return.
LMITO amount: $1,500
For the 2021-22 income year, an income of $60,000 qualifies for an estimated offset of $1,500.
Tax Payable With vs. Without LMITO
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What was the Low and Middle Income Tax Offset (LMITO)?
The Low and Middle Income Tax Offset (LMITO), often called the 'lamington', was a temporary tax offset for Australian residents with a taxable income up to $126,000. It was designed to provide tax relief and was available for the 2018-19 to 2021-22 income years. NOTE: This offset has now ended.
Behind the Formula
The calculator applies the ATO's tiered formula for the LMITO based on your taxable income for the 2021-22 financial year. The offset amount varied, starting at a base rate and increasing with income, before tapering off at higher income levels. The key thing to remember is that it was an offset, which reduces your tax payable, not a direct cash payment.
Expert Insights
- LMITO was not paid out during the year. It was automatically calculated by the ATO and applied to your tax assessment after you lodged your tax return, reducing your tax bill or increasing your refund.
- It was separate from the permanent Low Income Tax Offset (LITO). It was possible for a low-income earner to receive both the LITO and the LMITO, providing significant tax relief.
- The end of the LMITO in 2022 meant that many Australians saw a reduction in their tax refund or an increase in their tax bill from the 2022-23 financial year onwards, even if their income hadn't changed.
Actionable Tips
- Use this calculator for historical reference only, for example, if you are amending a tax return from the 2021-22 income year.
- Understand the difference between a tax offset and a tax deduction. A deduction reduces your taxable income, while an offset (like LMITO) directly reduces the amount of tax you have to pay.
- When budgeting for your tax return now, remember that the LMITO no longer applies, so your refund may be smaller than it was in previous years.
Real-World Examples
An individual earning $60,000
For the 2021-22 tax year, someone earning $60,000 would have been eligible for the maximum LMITO of $1,080. This would have directly reduced their tax bill by that amount.
An individual earning $100,000
Someone earning $100,000 was in the income range where the LMITO began to phase out. They would have received a partial offset, calculated based on the taper rate.
An individual earning $130,000
As their income was above the $126,000 threshold, this person was not eligible for any LMITO.
Glossary of Terms
Tax Offset
A dollar-for-dollar reduction in the amount of tax you have to pay. It is applied after your basic tax liability has been calculated.
Taxable Income
Your gross income minus any allowable deductions. This is the figure used to calculate how much income tax you owe.
ATO (Australian Taxation Office)
The principal revenue collection agency of the Australian Government.