Tax change gives almost every worker a pay rise - but only worth a cup of coffee for some

Treasurer Jim Chalmers has laid out his plan for tax reform in the 2024 Federal Budget. While Australia's favourite tax cut is firmly in the rearview mirror, a vast majority of Australian workers can look forward to taking more of their pay home with them in the coming weeks.

While the government has unveiled tax reform targeted at businesses, who can benefit to the tune of $20,000, the central 'cost of living tax cut' that will increase your take-home pay each month has already been announced.

Yep, you guessed it; the Stage 3 tax cuts. You might've heard about them but if you still don't quite get them, Yahoo Finance spoke to tax expert Mark Chapman to create a simple explainer just for you.

Find out how the 2024 Federal Budget will impact you by following Yahoo Finance’s coverage here.

How much extra money will I get from stage 3 tax cuts?

From July 1, there will be a change to the marginal tax rates. How much extra money you will see in your weekly pay will depend on which bracket you fall into.

These range from about $350 annually, to just over $4,500.

I don't want to be the bearer of bad news, but for those on the lower end of the scale that will end up being about $6 a week. A free coffee on Albo, anyone?

Jumping up one tax bracket, to $40,000, you could almost score a medium Quarter Pounder meal from McDonalds for your $12 a week pay boost.

On the higher end, that's more like $86. However, that was originally more like $174 before the Labor government revised the Stage 3 tax cuts to distribute more to low and middle-income households.

This won't be like the cheeky Low and Middle Income Tax Offset (LMITO, or more commonly known as the lamington) which gave a $1,500 lump sum boost to your tax return, which has been blamed for many copping an ATO bill for the first time ever last year.

But into the nitty gritty, care of H&R Block's Director Of Tax Communications.

How are tax rates changing in 2024?

First you can take a look at the new tax table, which shows the following changes:

• A cut in the 19 per cent tax rate to 16 per cent, saving $804 for those on taxable incomes of $45,000

• A cut in the 32.5 per cent rate to 30 per cent for incomes between $45,000 and $135,000

• Retaining the 37 per cent rate but increasing the threshold for it to apply to $135,000.

• Retaining the current 45 per cent tax rate but increasing the threshold to $190,000

So, what's the difference in my tax bracket under this new plan?

Trust me, I could write all day about the changes in tax rates. But there's a table that does a much better job.

The 'original stage 3 cuts' below are those passed by the Coalition. The new stage 2 show revised cuts legislated by the Albanese government, which come in on July 1.

You can calculate exactly how much that will be for you here.

"As originally designed, the tax cuts delivered most of the benefit to those on high incomes," Chapman said.

"So, nothing at all for people earning $45,000, only $875 for people earning $80,000 but a whopping $9,075 for people earning $200,000.

"This has now been rectified and, with the cost of living disproportionately impacting low and middle-income taxpayers, this will provide some much-needed extra cash in the pockets of hard-working families to pay mortgages, food and fuel bills."

How do I get my tax cut?

Taxpayers don’t need to do anything to get the tax cut.

Employers will automatically adjust the amount of tax they take out of your pay which means you should see an immediate increase in take-home pay from 1 July.

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