The Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 was introduced into Parliament on Wednesday 6 February 2024, bringing changes to existing individual tax rates. Let’s drive into the details:
Tax Rate Adjustments for 2024-25
The new legislation proposes adjustments to the tax rates for both resident and non-resident individuals, as well as working holiday-makers, effective from 1 July 2024. Here’s what’s changing:
Resident individual rates
- Income over $18,200 but not exceeding $45,000 is 16%;
- Income over $45,000 but not exceeding $135,000 is 30%;
- Income over $135,000 but not exceeding $190,000 is 37%; and
- Income exceeding $190,000 is 45%.
Non-resident individual rates:
- Income up to $135,000 will be taxed at 30%;
- Income over $135,000 but does not exceed $190,000 will be taxed at 37%;
- Income exceeding $190,000 will be taxed at 45%.
Working holiday-maker rates
- Income up to $45,000 will be taxed at 15%;
- Income over $45,000 but not exceeding $135,000 will be taxed at 30%;
- Income over$135,000 but not exceeding $190,000 will be taxed at 37%; and
- Income exceeding $190,000 will be taxed at 45%.
Medicare Levy Threshold Increases
In addition to tax rate changes, the Treasury Laws Amendment (Cost of Living -Medicare Levy) Bill 2024 introduces increases to the low-income thresholds for both individuals and families, including those eligible for the Seniors and Pensioners Tax Offset (SAPTO), effective for the 2023-24 income year:
Medicare levy low-income thresholds
The individual income threshold is $26,000.
The family income threshold is $43,846.
The income threshold for individual taxpayers eligible for the SAPTO is $41,089.
The income threshold for families eligible for the SAPTO is $57,198.
The child-student component of the income threshold for families is $4,027.
Phase-in limit
The individual phase-in limit is $ 32,500 .
The phase-in limit for individual taxpayers eligible for the SAPTO is $ 51,361 .
The phase-in limit for families is $54,807.
The phase in limit for families eligible for the SAPTO is $71,497.