Australia Tax Rate

Tax Cut Announcement for Australian Residents

Effective July 1, 2024

Key Changes:

The Australian government has announced significant changes to individual income tax rates and thresholds, effective from July 1, 2024. These changes are intended to provide tax relief to Australian residents.

Reduced Tax Rates:

The bottom tax rate will decrease from 19% to 16%. The 32.5% tax rate will decrease to 30%. The threshold above which the 37% tax rate applies will increase from $120,000 to $135,000.

Increased Tax-Free Threshold:

Individuals who are entitled to the full tax-free threshold will benefit from an increase in the amount they can earn before paying income tax. The tax-free threshold for residents for the 2024-25 financial year will be $19,800.

Financial Impact:

The proposed tax cuts will result in reduced tax liability for many Australian residents. For example, an Australian earning $40,000 per year who was a resident for the entire year would be taxed approximately $4,142 less under the new tax rate schedule.

Effective Date:

The revised tax rates and thresholds will take effect from July 1, 2024. Taxpayers should ensure they are aware of these changes to ensure accurate tax calculations.

For more information on the changes to individual income tax rates and thresholds, please refer to the Australian Taxation Office website.