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Australia

Key takeaways from the 2024 Australian Federal Budget for individuals:

13.6m

Australian taxpayers will receive a permanent tax cut, with a reduction in tax rates and an increase in the two highest thresholds.

1 July 2023

Is when the Medicare levy low-income thresholds will increase for singles, families, seniors and pensioners. 

New personal tax rates and thresholds for 2024-25

As previously announced, from 1 July 2024, 13.6 million Australian taxpayers will receive a permanent tax cut.

The tax cuts result in:

  • A reduction to the 19% tax rate to 16%
  • A reduction to the 32.5% tax rate to 30%
  • An increase to the 37% tax rate threshold from $120,000 to $135,000
  • An increase to the 45% tax rate threshold from $180,000 to $190,000

The tax rates for the 2023/24 financial year compared to the 2024/25 financial year are as follows:

2023/24 2024/25
Taxable income Tax % on excess Taxable income Tax % on excess
$18,200 Nil 19% $18,200 Nil 16%
$45,000 $5,092 32.5% $45,000 $4,288 30%
$120,000 $29,467 37% $135,000 $31,288 37%
$180,000 $51,667 45% $190,000 $51,638 45%

The abovementioned tax cuts for the 2024/25 financial year are a departure from the previously legislated Stage 3 of the Personal Income Tax Plan (PITP). The original stage three tax cuts (which are now superseded with the above) had abolished the entire 37% tax rate and addressed bracket creep by increasing the top marginal tax rate to phase in from $200,000.

Medicare levy low-income thresholds

Effective from 1 July 2023, the Medicare levy low-income thresholds will increase for singles, families, seniors and pensioners.

The new thresholds are listed below:

2022/2023 2023/2024
Singles $24,276 $26,000
Families $40,939 $43,846
Single seniors and pensioners $38,365 $41,089
Family seniors and pensioners $53,406 $57,198

 

For each dependent child or student, the family income thresholds will increase by a further $4,027, a boost from the previous amount of $3,760.

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