Addressing the pressing need for cost-of-living relief among Australians remains the Government’s foremost priority, with tax cuts being a pivotal measure to alleviate financial pressure.
The proposed tax cuts scheduled for 2024-25 are poised to make a substantial impact on your tax obligations, particularly if you fall within the middle or upper-income brackets. These cuts are anticipated to reduce the amount of tax you pay, consequently increasing your annual take-home pay.
Here’s what you can expect from the tax cuts taking effect from 1 July this year:
- Reduction of the 19 per cent tax rate to 16 per cent.
- Reduction of the 32.5 per cent tax rate to 30 per cent.
- Increase in the threshold for the application of the 37 per cent tax rate from $120,000 to $135,000.
- Increase in the threshold for the application of the 45 per cent tax rate from $180,000 to $190,000.
These tax adjustments are designed to benefit all 13.6 million Australian taxpayers from 2024–25 onward. For instance, an individual on the average wage of approximately $73,000 can anticipate a tax cut amounting to $1,504.
Furthermore, the Government is set to raise Medicare levy low-income thresholds for the fiscal year 2023–24. This move aims to reduce or eliminate entirely the Medicare levy for over a million Australians with lower incomes.
The overarching goal of these tax cuts is to enable Australians to retain more of their hard-earned income. The resulting increase in take-home pay is expected to create opportunities for individuals to consider taking on additional work hours, particularly benefiting women.
Regarding the implementation of these tax cuts on your tax return, there’s no action required on your part. If your income’s marginal tax rate has been impacted by these changes, the new tax rate will automatically be applied by your employer and reflected on your tax return.
Should you have any queries regarding the tax cuts or any other aspect of your tax return, please don’t hesitate to reach out for assistance.
