The following changes have been announced to the personal tax rates:
- The lowest rate of income tax will be reduced form 19 cents in a dollar, down to 16 cents, this means a taxpayer earning $50,000 per year will receive a tax cut worth over $900 a year.
- The second tax rate will be cut from 32.5% down to 30% and that will apply to an annual income of up to $135,000.
- The 37% rate will be retained and will now apply from $135,000 — an increase up from $120,000.
- In the first increase since 2008, the threshold for the top tax rate of 45% will also be increased. It will now kick in at $190,000, up from $180,000.
You will roughly receive the following tax cuts, based on your annual income:
| Income (per annum) | Annual tax cut |
|---|---|
| $45,000 | $804 |
| $75,000 | $1,154 |
| $100,000 | $2,179 |
| $150,000 | $3,729 |
A comparison of current vs proposed tax rates is shown in the following tables.
Current – Resident individual tax rates 2020–21 to 2023–24 — Stage 3 not yet implemented
| Taxable Income (Tax Brackets) | Marginal Tax Rate | Tax Liability Calculation |
|---|---|---|
| $0–$18,200 | Nil | Nil |
| $18,201–$45,000 | 19% | $0.19 for each $1 over $18,200 |
| $45,001–$120,000 | 32.5% | $5,092 + $0.325 for each $1 over $45,000 |
| $120,001–$180,000 | 37% | $29,467 + $0.37 for each $1 over $120,000 |
| $180,001 and over | 45% | $51,667 + $0.45 for each $1 over $180,000 |
Resident individual tax rates 2024–25 — currently legislated Stage 3 tax plan
| Taxable Income (Tax Brackets) | Marginal Tax Rate | Tax Liability Calculation |
|---|---|---|
| $0–$18,200 | Nil | Nil |
| $18,201–$45,000 | 19% | $0.19 for each $1 over $18,200 |
| $45,001–$200,000 | 30% | $5,092 + $0.30 for each $1 over $45,000 |
| $200,001 and over | 45% | $51,592 + $0.45 for each $1 over $200,000 |
Resident individual tax rates 2024–25 — proposed revised Stage 3 tax plan
| Taxable Income (Tax Brackets) | Marginal Tax Rate | Tax Liability Calculation |
|---|---|---|
| $0–$18,200 | Nil | Nil |
| $18,201–$45,000 | 16% | $0.16 for each $1 over $18,200 |
| $45,001–$135,000 | 30% | $4,288 + $0.30 for each $1 over $45,000 |
| $135,001–$190,000 | 37% | $31,288 + $0.37 for each $1 over $135,000 |
| $190,001 and over | 45% | $51,638 + $0.45 for each $1 over $190,000 |
Other matters and announcements
In addition to changing the tax rates and thresholds, the Government will also increase the low-income Medicare threshold and exempt more low-income earners from the 2% Medicare levy charge, it is yet to be seen if this increase will be the usual increase by consumer price index (CPI) or more.
A 12-month long price enquiry will be conducted by the Australian Competition and Consumer Commission (ACCC) to scrutinise the supermarket pricing and the difference between farm gate and retail pricing shoppers end up paying.
Please note, the proposed changes are currently in the announcement stage and require parliamentary approval to become law.
Contact us
We can help you work out the exact tax cuts you may receive based on your current or expected annual income post 1 July 2024.
Please feel free to contact our office if you have any queries in relation to this matter.