The promised overhaul of Stage 3 tax cuts has now passed through both houses of parliament, and into law.
The aim of the Federal Government initiative was to broaden the benefits of the original tax cuts, providing cost-of-living relief to low and middle-income earners, while halving the tax break offered to wealthier Australians.
What does it mean for you?
From July 1, 2024 all 13.6 million Australian taxpayers will receive a tax cut, with less tax coming out of pay packets as the government:
- reduces the 19% tax rate to 16%
- reduces the 32.5% tax rate to 30%
- increases the threshold above which the 37% tax rate applies from $120,000 to $135,000
- increases the threshold above which the 45 % tax rate applies from $180,000 to $190,000
At the same time the Medicare levy has been eliminated for more than a million Aussies on lower incomes.
The revised tax rates are:
| 0 – $18,200 | Nil |
| $18,201 to $45,000 | 16% plus medicare levy |
| $45,001 to $135,000 | 30% plus medicare levy |
| $135,001 to $190,000 | 37% plus medicare levy |
| Greater than $190,000 | 45% plus medicare levy |
So, in 2024-25 around 95% of taxpayers will face a marginal tax rate of 30% or less.
The Australian Government Treasury has provided a Tax cut calculator online to help estimate your tax cut, and if you have any questions about how this might affect your tax position, the Hall Browns team is available to talk it through.