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Federal Budget 2024-25 payroll changes and the new tax year

June 5, 2024

A large part of the 2024-25 Federal Budget is aimed at cost-of-living relief, there are also several important announcements relating to superannuation.  Some changes are already legislated to take place.  Others need to become law before they can be implemented. 


Individual income tax rates and threshold changes 

Changes to individual income tax rates and thresholds from 1 July 2024.  On 25 January 2024, the government announced changes to Individual income tax rates and thresholds from 1 July 2024. These changes are now law. 

From 1 July 2024, the proposed tax cuts will: 

  • reduce the 19 per cent tax rate to 16 per cent 
  • reduce the 32.5 per cent tax rate to 30 per cent 
  • increase the threshold above which the 37 per cent tax rate applies from $120,000 to $135,000 
  • increase the threshold above which the 45 per cent tax rate applies from $180,000 to $190,000. 


Increase in Medicare Levy Low-Income threshold  

The government has announced they are increasing the Medicare levy low-income thresholds for singles, families and seniors and pensioners to provide cost of living relief. The increase ensures that low-income individuals continue to be exempt from paying a Medicare levy or pay a reduced levy rate.   


  • threshold for singles has increased from $24,276 to $26,000. 
  • threshold for families has increased from $40,939 to $43,846. 
  • Threshold for single seniors and pensioners, has increased from $38,365 to $41,089. 
  • family threshold for seniors and pensioners has increased from $53,406 to $57,198. 
  • family income threshold will now increase by $4,027 for each dependent child, up from $3,760. 



Small Business Instant Asset Write-Off 

The government announced that small businesses (with an aggregated turnover of < $10 million) will be eligible for the $20,000 instant asset write-off for an additional year. 


This will enable small businesses to immediately deduct eligible depreciating assets costing less than $20,000 that are used or installed ready for use by 30 June 2025. From 1 July 2025, the asset cost threshold will revert to $1,000.  The existing small business accelerated depreciation rules will continue to apply for assets costing more than $20,000. 


There is also a proposal that is not legislated to increase the threshold to $30,000. 


HELP Debts - Changes to Student Loans 

A measure was announced ahead of the Budget to assist those who have student debts under the Higher Education Loan Program (HELP).  The reform includes changes to the calculation of HELP debts, amending the way HELP loans are indexed each year so that the lower of the Consumer Price Index (CPI) or the Wages Price Index will be used to apply indexation to HELP loans. This will hopefully allow students to repay these debts faster. 


This is effective 1 June 2023. In the past, HELP loans were indexed solely by reference to CPI. The ATO will automatically adjust any outstanding HELP loan balance that was indexed on 1 June 2023, and/or will be indexed on 1 June 2024, and apply any resulting credit to the individual’s HELP account. 


Superannuation changes 

Superannuation will be paid on Government funded Paid Parental Leave (PPL) for parents of babies born or adopted on or after 1 July 2025. 


Payments will be made annually to individuals’ super funds from 1 July 2026. This will help to reduce the impact of career breaks to care for young children on superannuation balances. 


The start date for this measure is 1 July 2025 with the Government estimating that approximately 180,000 families per year will benefit from superannuation on paid parental leave. The federal government is committed to providing additional investment over the next two years to provide additional support for employers in administering paid parental leave. 


As part of the 2024-25 Federal Budget, the Treasurer announced a 12-month extension to 30 June 2025 of the current freeze in deeming rates for retirees. 


This measure will assist part pensioners with bank deposits, investments and also super pension income streams which are captured under the deeming rules. The measure will allow retirees to benefit from increases in interest rates and returns without reductions in their age pension. 


The deeming rate has been frozen for the last two years with the top rate unchanged at 2.25%. 


Previous Super Announcements 


Super guarantee 

From 1 July 2024, the super guarantee, that is - the percentage of your wage that your employer is required to pay into your super account, will increase from 11.0% to 11.5%. The super guarantee will continue to rise in 0.5% increments until it reaches 12% in 2025. 


Changes to super tax concessions 

On 28 February 2023, the Australian Government announced from 1 July 2025 a 30% concessional tax rate will be applied to future earnings for superannuation balances above $3 million, instead of the current 15%. This measure is not yet law. 


Detailed information can be found on the ATO websites and in the Treasury Superannuation Concessions Factsheet. 


Increase in super contribution caps 


From 1 July 2024, both concessional and non-concessional contributions caps will be increasing as follows: 


The total super balance for non-concessional contributions, remains at $1.9 million. The general transfer balance cap also remains unchanged at $1.9 million.

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