Essential tax benefit for working holiday visa holders in Australia
Up to $700 AUD guaranteed!
Automatic tax offset for low-income earners
The Low Income Tax Offset (LITO) is one of Australia's most fundamental tax support measures, designed to provide relief for taxpayers on modest incomes. Unlike deductions you need to chase, LITO is completely automatic - the Australian Taxation Office applies it when processing your tax return.
This non-refundable offset can reduce your tax bill to zero, though any unused portion isn't paid as cash. LITO aims to boost workforce participation and make working more attractive for lower-income earners by ensuring they keep more of what they earn.
Completely automatic!
No applications, no red tape - just lodge your tax return and LITO is calculated for you automatically.
Simple eligibility criteria that most low-income earners meet
You must be an Australian resident for tax purposes for some or all of the financial year. If you were only a resident for part of the year, your offset will be proportionally scaled.
Includes:
Your taxable income must be under $66,667 to receive any LITO benefit. This includes all income sources: wages, government payments, investment income, and business income.
Income thresholds:
You receive the full maximum Low Income Tax Offset of $700. This amount directly reduces your tax liability dollar-for-dollar.
✓ Maximum benefit zone
LITO reduces by 5 cents for every dollar above $37,500. For example, at $40,000 income, you'd receive $575 offset.
⚡ Phase-out begins
LITO reduces by 1.5 cents for every dollar above $45,000. The offset completely phases out at $66,667.
📉 Final phase-out
| Taxable Income | LITO Amount Calculation |
|---|---|
| Up to $37,500 | Maximum $700 offset |
| $37,501 - $45,000 | $700 minus 5¢ for every $1 above $37,500 |
| $45,001 - $66,667 | $325 minus 1.5¢ for every $1 above $45,000 |
| Above $66,667 | No Low Income Tax Offset |
Income: $30,000
LITO: $700
Income: $40,000
LITO: $575
Income: $50,000
LITO: $250
Complete your tax return accurately using myTax, a tax agent, or paper form
The ATO checks your income and residency status, then applies LITO if eligible
Your notice of assessment shows LITO applied and any refund due
No special forms needed
There's no separate application for LITO - it's automatically calculated when you lodge any standard tax return. Just be accurate and honest with your income details.
| LITO | LMITO | |
|---|---|---|
| Status | ✓ Permanent | ✗ Ended 2022 |
| Max Amount | $700 | $1,080 |
| Income Limit | $66,667 | ~$126,000 |
| Target | Low income | Low-middle income |
Seniors and Pensioners Tax Offset - for older Australians and pensioners
For taxpayers with low-income or unemployed spouses
For residents in remote or isolated areas of Australia
Low Income Superannuation Tax Offset - for super contributions
Multiple offsets can apply
You may be eligible for several tax offsets simultaneously. The ATO automatically applies all offsets you're entitled to when processing your return.
You're eligible for LITO if you're an Australian resident for tax purposes and your taxable income is under $66,667. The full $700 offset applies to incomes up to $37,500, with gradual reductions for higher incomes until it phases out completely.
Yes, LITO is a permanent feature of the Australian tax system. For the 2024-25 financial year, the offset remains at up to $700 for eligible taxpayers, automatically applied when you lodge your tax return.
While LITO provides up to $700, many taxpayers receive larger refunds of $1,500 or more when combined with other offsets, deductions, and overpaid tax throughout the year. Your total refund depends on various factors including tax withheld, work expenses, and other eligible offsets.
For 2024-25, the LITO income thresholds remain: full $700 offset for incomes up to $37,500, gradual reduction from $37,501-$66,667, and no offset for incomes above $66,667. These thresholds are indexed and may change with future budgets.
No application needed! LITO is automatically calculated and applied by the ATO when you lodge your tax return. Simply ensure your tax return is accurate and complete, and the ATO will determine your eligibility and apply the offset automatically.
No, LITO is non-refundable, meaning it can only reduce your tax liability to zero. If you don't owe any tax, you won't receive the offset as a cash refund. However, it can significantly reduce or eliminate your tax bill if you do owe tax.
We’ll let you know your total return during our call.