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 The original stage three tax cuts (which are now superseded with the above) had abolished the entire 37% tax rate and addressed bracket creep by increasing the top marginal tax rate to phase in from $200,000.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.
