New individual tax rates and thresholds for 2024 – 2025

New Individual income tax rates and thresholds will come into effect from 1 July 2024.

If you are an Australian taxpayer, you are entitled to the tax-free threshold of $18,200. This means

you can earn up to $18,200 each year without paying tax.

Thresholds in 2024 -25	Rates in 204-25 (%)
0-18,200	Tax free
18,201-45,000	16
45,001-135,000	30
135,001-190,000	37
Over 190,000	45

Important to know about Tax cut

To alleviate cost of living pressures, the Australian government has announced a $300 credit for every household and a $325 credit for small businesses on their electricity bills. This automatic credit is expected to help curb inflation. Additionally, stage 3 tax cuts will be implemented from 1 July 2024, saving the average households $1,900 annually.

Small businesses with an annual turnover of less than $10 million will soon enjoy a temporary increase to the instant asset write off threshold. In the 2023 income year, they will be able to immediately deduct the full cost of eligible assets valued up to $20,000 each, instead of the current $1,000 limit. This change will enable businesses to claim deductions on multiple assets, potentially improving their cash flow.

Please note!

If you earn between $18,201 and $45,000:

your first $18,200 remains tax free, and
you will pay 16 cents tax on every dollar you earn between $18,201 and $45,000.

If you earn between $45,001 and $135,000:

your first $18,200 remains tax free, and
you will pay 16 cents tax on every dollar you earn between $18,201 and $45,000, plus
30 cents tax on every dollar you earn between $45,001 and $135,000.

If you earn between $135,001 and $190,000:

your first $18,200 remains tax free, and
you will pay 16 cents tax on every dollar you earn between $18,201 and $45,000, plus
30 cents tax on every dollar you earn between $45,001 and $135,000, plus
37 cents tax on every dollar you earn between $135,001 and $190,000.

Comparison if you earn 84,000 per year
2023-24 settings	Under new tax cuts
Estimated annual tax liability	Estimates annual tax liability
$19,447	$17,668