Newsletter; 2024/2025 Budget Update (your five minute guide)
Please find below a summary of the some of the more relevant budget announcements that affect taxation.
There were no substantive tax measures in the budget.
2024/2025 individual tax rates
Taxable income range Marginal tax rate
$ 0 - $18,200 0%
$ 18,201 - $45,000 16%
$ 45,001 - $135,000 30%
$135,001 - $190,000 37%
$190,001+ 45%
These rates exclude the 2% Medicare Levy.
The effective top personal marginal tax rate is 47% including the Medicare Levy.
HECS Debt
From 1 June 2023, HECS indexation will be calculated on whichever figure is lower out of the consumer price index (CPI) and the wage price index (WPI). Last year’s 7.1% CPI indexation will be lowered to 3.2% WIP indexation with a backdated credit applied to the HECS accounts.
Skills and training boost
From 29 March 2022 to 30 June 2024, small and medium business entities (with turnover less than fifty million dollars) will be able to deduct 120% of their expenditure incurred on external training courses provided to their employees. The training provider must be listed on these registers for the expenditure to be eligible:
http://www.teqsa.gov.au/national-register
Small business asset deductions
From 6 October 2020 to 30 June 2023, small business entities are able to immediately write off each eligible business asset they buy (uncapped limit).
From 1 July 2023 to 30 June 2025, the threshold will be reduced to $20,000 and available to all business entities with turnover less than ten million dollars.
Small businesses can also deduct the value of their simplified depreciation pools at the end of the income year where the balance falls under the relevant threshold.
Energy rebate
From 1 July 2024, the government will provide a $325 rebate to eligible small businesses, paid in quarterly instalments on your electricity bill. To be eligible, annual electricity consumption needs to be below a threshold varying from 40MWh to 160MWh (160MWh in SA):
https://www.energy.gov.au/energy-bill-relief-fund
Employee superannuation
From 1 July 2024, the super guarantee rate will increase to 11.5%.
2020/2021 9.5% 2023/2024 11.0%
2021/2022 10.0% 2024/2025 11.5%
2022/2023 10.5% 2025/2026 12.0%
From 1 July 2026, employers will be required to pay their employee’s superannuation guarantee on the same day that they pay salary and wages.
Earnings for superannuation balances above $3 million taxed at 30%
From 1 July 2025, the Government will reduce the tax concessions available to individuals with a total superannuation balance exceeding $3 million.
Earnings relating to assets above the $3 million threshold will be taxed at 30%. Earnings relating to assets below the $3 million threshold will be taxed at 15%.
