Personal income tax will be cut by $144 billion over the next seven years after the Senate approved the Government's progressive income tax cuts.

The plan will see a tax cut of $7,225 a year for people on $200,000 from 2024-25, while someone earning $30,000 would get a tax cut of $200 a year.

The first stage includes a rebate of up to $530 for the next financial year, as well as a change from this July to the 32.5 per cent tax bracket.

This will see about 3 million people get an extra $135 a year.

After five years, more changes kick in, so that at the end of seven years the tax system will have been flattened.

AT that time, everyone earning between $41,000 and $200,000 will pay the same rate of tax, leaving about 94 per cent of taxpayers paying 32.5 per cent tax or lower.

The bill for the cuts passed 37 to 33 after a long and sometimes heated debate about whether the move would help bankers or battlers.

Two One Nation senators, two from Centre Alliance, David Leyonhjelm, Cory Bernardi, Brian Burston, Derryn Hinch and Fraser Anning all voted in favour of the Government's plan.

Labor, the Greens and independent Tim Storer voted against it.