On 25 January 2024 the government announced its decision to change the original stage three tax cuts for individuals from 1 July 2024. The changes will see taxpayers earning:
- under $45,000 receive tax cuts up to $804 (previously $nil)
- between $45,001-$146,499 receive tax cuts up to $3,729 (up to $804 higher after changes)
- $146,500 is the break even point where the tax cut will be $3,729 (no difference after changes)
- above $146,501-$200,000+ will receive less tax cuts up to $4,529 (up to $4,546 lower after changes)
Each individual’s tax savings will depend on your taxable income, as seen in the table below.
| Taxable Income | 2023-24 | 2024-25 | Tax Savings |
|---|---|---|---|
| $45,000 | $5,092 | $4,288 | $804 |
| $70,000 | $13,217 | $11,788 | $1,429 |
| $130,000 | $33,167 | $29,788 | $3,379 |
| $170,000 | $47,967 | $44,238 | $3,729 |
| $200,000 | $60,667 | $56,138 | $4,529 |
Tax Table Updates
The current resident tax rates for 2023-24 are:
| Taxable Income | Tax on this income |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 19c for each $1 over $18,200 |
| $45,001 – $120,000 | $5,092 plus 32.5c for each $1 over $45,000 |
| $120,001 – $180,000 | $29,467 plus 37c for each $1 over $120,000 |
| $180,001 and over | $51,667 plus 45c for each $1 over $180,000 |
The proposed tax cuts are expected to pass through parliament, delivering the following changes (highlighted) from 2024-25:
| Taxable Income | Tax on this income |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,288 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,288 plus 37c for each $1 over $135,000 |
| $190,001 and over | $51,638 plus 45c for each $1 over $190,000 |
Impact on Individuals
Each individual’s tax savings will depend on your taxable income, as seen in the table below.
| Taxable Income | 2023-24 | 2024-25 | Tax Savings |
|---|---|---|---|
| $45,000 | $5,092 | $4,288 | $804 |
| $70,000 | $13,217 | $11,788 | $1,429 |
| $130,000 | $33,167 | $29,788 | $3,379 |
| $170,000 | $47,967 | $44,238 | $3,729 |
| $200,000 | $60,667 | $56,138 | $4,529 |
Impact on Employers – Wages & Super
Starting 1 July 2024, employers need to ensure that their payroll systems are set up correctly with the changes to PAYG Withholding under the new tax tables.
In addition, the Super Guarantee rate is updating, increasing from 11% to 11.5% and due quarterly as follows:
| Quarter | Period | Payment Due Date |
|---|---|---|
| 1 | 1 July – 30 September | 28 October 2024 |
| 2 | 1 October – 31 December | 28 January 2025 |
| 3 | 1 January – 31 March | 28 April 2025 |
| 4 | 1 April – 30 June | 28 July 2025 |
The tax cuts and thresholds above are only relevant to Australian Residents, for further information on tax rates for Non-Australian Residents, please see the ATO website. If you have any questions about these changes, please do not hesitate to contact your Altitude Adviser to find out more.
