The following key tax and compliance changes took effect from 1 July 2014. These updates impact individuals, employers, superannuation funds and businesses, and should be considered when planning for the 2014–15 financial year.
Personal income tax rates for 2014–15
The individual tax rates for the 2014–15 year are as follows:
Taxable income
0 to $18,200 – Nil
$18,201 to $37,000 – 19 cents for each dollar over $18,200
$37,001 to $80,000 – $3,572 plus 32.5 cents for each dollar over $37,000
$80,001 to $180,000 – $17,547 plus 37 cents for each dollar over $80,000
$180,001 and over – $54,547 plus 47 cents** for each dollar over $180,000
* The table excludes the Medicare Levy of 2 percent. This reflects a 0.5 percent increase to fund the National Disability Insurance Scheme. Low-income tax offsets and Medicare levy reductions have not been applied.
** The top marginal rate includes the Temporary Budget Repair Levy of 2 percent.
Superannuation
Superannuation Guarantee Charge
The compulsory employer Superannuation Guarantee increased from 9.25 percent to 9.5 percent.
Excess contributions changes
From 1 July 2013 (now fully in effect), individuals can withdraw excess concessional contributions and associated earnings. Key points include:
• up to 85 percent of excess concessional contributions and related earnings can be withdrawn
• excess contributions are taxed at the individual’s marginal tax rate rather than at the previous 31.5 percent rate
• individuals will receive a tax offset of 15 percent, representing the contributions tax already paid
• excess non-concessional contributions do not qualify for this offset
Fringe Benefits Tax
The FBT rate will increase to align with the top marginal tax rate of 49 percent. This change takes effect from the start of the FBT year on 1 April 2015.
Research and Development
R&D tax offset rates have been reduced by 1.5 percent:
• Refundable offset: 43.5 percent
• Non-refundable offset: 38.5 percent
Compliance reporting
The introduction of third-party reporting and expanded data-matching requirements has been deferred until 1 July 2016.
Small business provisions still in effect
Despite attempts to repeal certain measures, the Senate did not pass the legislation. As a result, the following provisions remain current law:
• loss carry-back rules
• small business instant asset write-off threshold of $6,500
• first $5,000 instant write-off for motor vehicles
Taxpayers may continue to apply these concessions. However, businesses should be aware that the Government may reintroduce changes and backdate amendments. If this occurs, taxpayers who have claimed under the current rules may need to amend their returns. For now, the existing provisions remain valid.
Frequently Asked Questions
Does the 2014/15 tax table include the Medicare Levy?
No. The table excludes the 2 percent Medicare Levy. Low income tax offsets and other reductions are also not included.
Did the Superannuation Guarantee increase in 2014?
Yes. The Superannuation Guarantee rose from 9.25 percent to 9.5 percent from 1 July 2014.
Were there Fringe Benefits Tax changes in this budget?
The FBT rate was set to rise to reflect the new top marginal tax rate of 49 percent. This adjustment takes effect from 1 April 2015.
If you have any questions about the budget and how it impacts you, please contact us here.
