2024/25 Federal Budget Overview
Personal Income Tax Changes
The government has updated the personal income tax rates starting from July 1, 2024. Here’s what you need to know:
Australian Resident Individual Income Tax Rates
| Income Year | Tax Rate | Income Range |
|---|---|---|
| 2024 | 0% | $0 – $18,200 |
| 2024 | 19% | $18,201 – $45,000 |
| 2024 | 32.5% | $45,001 – $120,000 |
| 2024 | 37% | $120,001 – $180,000 |
| 2024 | 45% | $180,001+ |
| From 2025 | 0% | $0 – $18,200 |
| From 2025 | 16% | $18,201 – $45,000 |
| From 2025 | 30% | $45,001 – $135,000 |
| From 2025 | 37% | $135,001 – $190,000 |
| From 2025 | 45% | $190,001+ |
Foreign Resident Individual Income Tax Rates
| Income Year | Tax Rate | Income Range |
|---|---|---|
| 2024 | 32.5% | $0 – $120,000 |
| 2024 | 37% | $120,001 – $180,000 |
| 2024 | 45% | $180,001+ |
| From 2025 | 30% | $0 – $135,000 |
| From 2025 | 37% | $135,001 – $190,000 |
| From 2025 | 45% | $190,001+ |
Medicare Levy Low-Income Thresholds
The government has increased the Medicare levy low-income thresholds for singles, families, and seniors starting from July 1, 2023. Here are the details:
| Category | No Levy Payable | Reduced Levy Payable | Full Levy Payable |
|---|---|---|---|
| Individual taxpayer | $26,000 | $26,001 – $32,500 | $32,501 |
| Individual taxpayer eligible for SAPTO | $41,089 | $41,090 – $51,361 | $51,362 |
| Families eligible for SAPTO | $57,198 | $57,199 – $71,497 | $71,498 |
| Families not eligible for SAPTO | $43,846 | $43,847 – $54,807 | $54,808 |
For each dependent child or student, the family income thresholds will increase by $4,027.
Small Business Measures
Temporary Increase to Instant Asset Write-Off
For the 2025 income year, small businesses can instantly write off assets costing less than $20,000. This is an increase from the previous threshold of $1,000. This applies to assets first used or installed by June 30, 2025.
Retaining BAS Refunds
The ATO can now take up to 30 days to notify taxpayers if they are retaining a BAS refund for further investigation, up from the previous 14 days. Legitimate refunds will still be processed quickly.
Energy Bill Relief
The government is offering an additional $325 in energy bill relief for small businesses to help with electricity costs.
Digital ID System
The expansion of the Digital ID System will reduce the amount of ID data small businesses need to store and protect, making it easier for them to operate.
Building Cyber Resilience
Small businesses will receive support to improve their cyber security, including free online training, a cyber resilience service, and a cyber health check tool.
Superannuation
Superannuation on Paid Parental Leave
From July 1, 2025, the government will pay superannuation on Paid Parental Leave. Parents will receive an extra payment to their super fund based on 12% of their Paid Parental Leave payments.
Unpaid Superannuation Entitlements
The government will pursue unpaid superannuation owed by employers in liquidation or bankruptcy starting from July 1, 2024.
Other Budget Measures
Tax Deductions for Intangibles
The government will not continue with the measure to prevent tax deductions for payments to low-tax jurisdictions. Instead, they will address this through new global and domestic tax measures.
Social Security Deeming Rates
Social security deeming rates will be frozen at their current levels until June 30, 2025, to help pensioners and income support recipients manage living costs.
Tertiary Education System Reforms
The government will fund reforms to limit the indexation of student loans and provide payments to students undertaking mandatory placements in certain fields.
Energy Bill Relief for Households
From July 1, 2024, every Australian household will receive a total rebate of $300 on their electricity bills, applied in quarterly instalments.