Personal tax rates: Stage 3 (as revised) confirmed from 2024–2025 (May 2024 Federal Budget Update)

Published on 15 May 2024 by Drew Pflaum
Categories: Accounting, News

In the 2024–2025 Federal Budget, the Government did not announce any further changes to the personal tax rates.

The Government’s revised Stage 3 tax changes (as announced on 25 January 2024 and enacted into law by the Treasury Laws Amendment (Cost of Living Tax Cuts) Act 2024) commence from 1 July 2024. The Treasurer said all 13.6 million taxpayers will receive a tax cut from 1 July 2024. The average annual tax cut is $1,888 (or $36 a week).

The tax rates and income thresholds from the 2024-25 for residents (as already legislated) are:

• taxable income up to $18,200 – nil;
• taxable income of $18,201 to $45,000 – nil plus 16% of excess over $18,200;
• taxable income of $45,001 to $135,000 – $4,288 plus 30% of excess over $45,000;
• taxable income of $135,001 to $190,000 – $31,288 plus 37% of excess over $135,000; and
• taxable income of more than $190,001 – $51,638 plus 45% of excess over $190,000.

This means, when compared to 2023–2024, that for 2024–2025 the 19% tax rate has been reduced to 16%; the 32.5% tax rate has been reduced to 30%; the 37% tax rate threshold has been increased from $120,000 to $135,000; and the 45% tax rate threshold has been increased from $180,000 to $190,000.