2024–25 Federal Budget: What It Means for Individual Taxpayers and Families
At Bramelle Partners, we break down what the 2024–25 Federal Budget means for individual taxpayers and families. Treasurer Jim Chalmers’ third Budget focuses on cost-of-living relief, revised Stage 3 tax cuts and enhanced compliance measures designed to strengthen the tax system.
Below is a summary of the key personal tax measures and what they may mean for you.
Revised Stage 3 Tax Cuts Confirmed
The 2024–25 Budget did not announce any further changes to personal tax rates. The Government’s revised Stage 3 tax cuts, announced on 25 January 2024 and enacted through the Treasury Laws Amendment (Cost of Living Tax Cuts) Act 2024, commence from 1 July 2024.
The Treasurer stated that all 13.6 million taxpayers will receive a tax cut from 1 July 2024, with the average annual tax cut estimated at $1,888, or around $36 per week.
Resident Tax Rates and Thresholds From 2024–25
The personal income tax rates and thresholds for Australian residents from the 2024–25 income year onwards are as follows:
Tax Rates and Income Thresholds (Residents)
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$0 – $18,200: Nil
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$18,201 – $45,000: Nil + 16% of excess over $18,200
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$45,001 – $135,000: $4,288 + 30% of excess over $45,000
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$135,001 – $190,000: $31,288 + 37% of excess over $135,000
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$190,001 and over: $51,638 + 45% of excess over $190,000
Comparison With 2023–24 Rates
Compared with 2023–24, the key changes are:
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The 19% tax rate has reduced to 16%
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The 32.5% tax rate has reduced to 30%
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The 37% tax rate threshold has increased from $120,000 to $135,000
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The 45% tax rate threshold has increased from $180,000 to $190,000
Tax Rates for Foreign Residents
For the 2024–25 and later income years, foreign resident tax rates are:
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$0 – $135,000: 30%
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$135,001 – $190,000: 37%
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$190,001 and over: 45%
Tax Rates for Working Holiday Makers
For the 2024–25 and later income years, the tax rates for working holiday makers are:
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$0 – $45,000: 15%
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$45,001 – $135,000: 30%
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$135,001 – $190,000: 37%
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$190,001 and over: 45%
Low Income Tax Offset Remains Unchanged
No changes were made to the low income tax offset (LITO) in the 2024–25 Budget.
While the low and middle income tax offset (LMITO) ceased from 1 July 2022, eligible low and middle income taxpayers remain entitled to the LITO.
LITO Thresholds and Amounts
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$0 – $37,500: $700
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$37,501 – $45,000: $700 minus 5% of the excess over $37,500
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$45,001 – $66,667: $325 minus 1.5% of the excess over $45,000
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$66,668 and over: Nil
The maximum LITO is $700. It phases out at 5 cents per dollar between $37,500 and $45,000, and at 1.5 cents per dollar between $45,000 and $66,667.
Medicare Levy Low-Income Thresholds for 2023–24 Confirmed
The Medicare levy low-income thresholds for 2023–24 were announced earlier on 25 January 2024 alongside the Stage 3 tax changes and enacted through the Treasury Laws Amendment (Cost of Living – Medicare Levy) Act 2024.
Updated Medicare Levy Thresholds
For the 2023–24 income year:
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Singles: $26,000 (up from $24,276)
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Couples with no children: $43,846 (up from $40,939)
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Additional threshold per dependent child or student: $4,027 (up from $3,760)
For seniors and pensioners eligible for SAPTO:
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Singles: $41,089 (up from $38,365)
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Couples: $57,198 (up from $53,406), plus $4,027 per dependent child or student
Personal Income Tax Compliance Program Extended
The Government will extend the ATO Personal Income Tax Compliance Program for one year from 1 July 2027.
This allows the ATO to continue proactive and corrective compliance activities in areas such as:
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Overclaiming of deductions
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Incorrect income reporting
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Inappropriate tax agent influence
The extension also supports the ATO’s focus on emerging risks, including deductions related to short-term rental properties. The measure is estimated to increase receipts by $180.3 million and increase payments by $44.3 million over five years from 2023–24.
HECS and HELP Debt Changes
The Budget did not include further detail on the previously announced changes to HELP debt indexation, which will apply the lower of CPI or the Wages Price Index and be backdated to 2022–23.
However, the Budget allocated:
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$239.7 million over five years from 2023–24
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An additional $250.5 million from 2028–29 to 2034–35
This funding is intended to compensate tertiary institutions, with the measure estimated to reduce outstanding HELP loans by around $3.0 billion.
Energy Bill Relief Extended
The Government will provide $3.5 billion over three years from 2023–24 to extend and expand the Energy Bill Relief Fund.
This includes:
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A $300 rebate for all Australian households
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A $325 rebate for eligible small businesses
These rebates apply to 2024–25 energy bills.
Fast-Tracked Passport Applications
From 1 July 2024, the Government will introduce fast-track passport processing.
Fast-track applications will be processed within five business days for an additional fee of $100.
Get Advice on the 2024–25 Budget Changes
The 2024–25 Federal Budget introduces a range of personal tax, cost-of-living and compliance measures that may affect your tax position. Given the complexity of the changes, professional advice can help you understand how these measures apply to your circumstances and ensure you make informed decisions going forward.
Speak to one of our accountants if you have any questions about the changes in tax for 2024.
