Low Income Tax Offset 2016 Calculator

Introduction & Importance

The 2016 low income tax offset (LITO) was a tax offset designed to help low and middle-income earners. It was a non-refundable tax offset, meaning it could only be used to reduce your tax liability, not to generate a refund.

How to Use This Calculator

1. Enter your annual income.
2. Enter the number of dependents you have.
3. Click ‘Calculate’.

Formula & Methodology

The LITO was calculated as follows:

LITO = (Income - Tax Free Threshold) * (LITO Rate)

Where:

• Income is your taxable income.
• Tax Free Threshold was $18,200 in 2016.
• LITO Rate was 18.9% for incomes up to $30,000, and 4.5% for incomes between $30,000 and $65,000.

Real-World Examples

Example 1

A single person with an income of $25,000 and no dependents would have received a LITO of:

$25,000 - $18,200 = $6,800 * 18.9% = $1,261.20

Example 2

A couple with a combined income of $50,000 and two dependents would have received a LITO of:

$50,000 - $18,200 * 2 = $13,600 * 4.5% = $612

Data & Statistics

Income	LITO
$20,000	$1,134
$35,000	$727.50
$50,000	$0

Expert Tips

• Ensure you declare all your income to maximize your LITO.
• Consider using this calculator to estimate your tax liability.

Interactive FAQ

What is the tax free threshold?

The tax free threshold is the amount you can earn in a year without paying tax.

How many dependents can I claim?

You can claim one dependent for each child or student under 18.