Do I need to claim LITO?

No. LITO is automatic. The ATO applies it when it assesses your tax return, based on your taxable income. There is nothing to fill in to receive it.

The maximum is $700 for taxable income up to $37,500. It reduces by 5c per dollar to $325 at $45,000, then by 1.5c per dollar, reaching zero at $66,667.

Does LITO reduce the Medicare levy?

No. LITO reduces income tax only. It does not reduce the Medicare levy, the surcharge or a HELP repayment, and it cannot take your income tax below zero.

Low income tax offset (LITO)

The Low Income Tax Offset, or LITO, cuts the income tax of lower earners. You do not claim it. The ATO applies it automatically when your return is assessed. The maximum is $700 for taxable income up to $37,500. It then reduces by 5c for each dollar to $45,000, where it is $325, and by 1.5c for each dollar after that, reaching zero at $66,667. LITO reduces income tax only. It never reduces the Medicare levy or a HELP repayment, and it cannot take your tax below zero. This is general information, not advice.

LITO by taxable income
Taxable income	Offset
Up to $37,500	$700 (maximum)
$37,500 – $45,000	$700 less 5c per $1 over $37,500
$45,000 – $66,667	$325 less 1.5c per $1 over $45,000
Over $66,667	Nil

LITO is applied automatically in your assessment — see its effect on a real salary, e.g. $45,000 or $60,000, or use the take-home calculator.

Frequently asked

Do I need to claim LITO?: No. LITO is automatic. The ATO applies it when it assesses your tax return, based on your taxable income. There is nothing to fill in to receive it.
How much is LITO?: The maximum is $700 for taxable income up to $37,500. It reduces by 5c per dollar to $325 at $45,000, then by 1.5c per dollar, reaching zero at $66,667.
Does LITO reduce the Medicare levy?: No. LITO reduces income tax only. It does not reduce the Medicare levy, the surcharge or a HELP repayment, and it cannot take your income tax below zero.