22 March 2024
From 1 July 2024, the Government will implement tax cuts for all Australian taxpayer's to provide cost of living relief, return back creep and boost labour supply.
Stage 3 tax cut changes
The latest changes to the tax cuts include changing income ranges and tax rates in the marginal tax brackets. These include:
- Reducing the 19 per cent tax rate to 16 per cent
- Reducing the 32.5 per cent tax rate to 30 per cent
- Increasing the threshold above which the 37 per cent tax rate applies from $120,000 to $135,000
- Increasing the threshold above which the 45 per cent tax rate applies from $180,000 to $190,000
New personal tax rates and thresholds for 2024-25
Thresholds in
2023-24 ($) | Rates in
2023-24 (%) | New thresholds in
2024-25 ($) | New rates in
2024-25 (%) |
|---|
| 0 - 18,200 | Tax free | 0 - 18,200 | Tax free |
| 18,201 - 45,000 | 19 | 18,201 - 45,000 | 16 |
| 45,001 - 120,000 | 32.5 | 45,001 - 135,000 | 30 |
| 120,001 - 180,000 | 37 | 135,001 - 190,000 | 37 |
| > 180,000 | 45 | > 190,000 | 45 |
Who will be impacted by the Stage 3 tax cuts?
These tax cuts will provide tax relief to all 13.6 million Australian taxpayer's from 2024-25 onwards, increasing their take-home pay.
The Government has also committed to increasing the Medicare levy low-income thresholds for 2023-24, reducing or eliminating altogether the amount of Medicare levy paid by more than a million Australians on lower incomes.
Treasury has released the Tax cuts to help Australians with the cost of living factsheet with detailed information on the new tax cuts.
Need some advice?
Contact an AR Advisor on 9321 3362 to discuss the impact of these Stage 3 tax cuts on your personal situation.