The Cost of Living Tax Cut Bill 2024 was passed on the 5th of March 2024 to change the individual income tax rates from 1 July 2024.
 
This bill now supersedes the individual stage 3 tax cuts that were legislated in 2019 and set to apply from 1 July 2024.
 
While both the cost of living and stage 3 tax rates see individuals paying less tax in the 2025 financial year, compared to the 2024 financial year, individuals with an annual income greater than $146,493 will receive less of a tax benefit under the cost of living tax rates. 
 
A comparison of the 2024-25 financial year tax savings to the 2023-2024 financial year under the previous and new tax rates is summarised below:

Annual Income 2025 Tax Cut - 2019 Legislated Stage 3 Rate 2025 Tax Cut - Newly Legislated 2024 Cost of Living Rate Difference
$45,000 - $804 $804
$75,000 $750 $1,554 $804
$100,000 $1,375 $2,179 $804
$146,500 $3,730 $3,729 ($1)
$150,000 $3,975 $3,729 ($246)
$185,000 $6,825 $4,129 ($2,696)
$200,000 $9,075 $4,529 ($4,546)

 

The changes to the resident individual tax rates and thresholds are summarised in the tables below:

2023 – 2024 Tax Rates – Current Rates
Thresholds Tax rates Tax payable 
$0 – $18,200  Tax-free Nil
$18,201 – $45,000  19%  19c for each $1 over $18,200
$45,001 – $120,000 32.5% $5,092 plus 32.5c for each $1 over $45,000
$120,001 – $180,000  37% $29,467 plus 37c for each $1 over $120,000
$180,000 and over 45% $51,667 plus 45c for each $1 over $180,000

 

2024  – 2025 Tax Rate – 2019 Stage 3 Rate
Thresholds Tax rates Tax payable 
$0 – $18,200  Tax-free Nil
$18,201 – $45,000 19%  19c for each $1 over $18,200
$45,001 – $200,000  30% $5,092 plus 30c for each $1 over $45,000
$200,000 and over 45% $51,592 plus 45c for each $1 over $200,000

 

2024  – 2025 Tax Rate – 2024 Cost of Living Rate
Thresholds Tax rates Tax payable 
$0 – $18,200  Tax-free Nil
$18,201 – $45,000 16% 16c for each $1 over $18,200 
 $45,001 – $135,000 30% $4,288 plus 30c for each $1 over $45,000 
 $135,001 – $190,000 37% $31,288 plus 37c for each $1 over $135,000
$190,000 and over  45% $51,638 plus 45c for each $1 over $190,000

 

Don't hesitate to get in touch with your Ulton advisor if you have any questions about your tax planning for 2024 and future financial years.

 

 


Sources

Cost of living – tax rates
https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r7140

Stage 3 – tax rate
https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r6345#:~:text=Amends%20the%3A%20Income%20Tax%20Assessment,%24700%20from%20the%202022%2D23

 

 

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