Personal Income Tax proposals

Personal Income Tax proposals
Personal Income Tax proposals

With no new individual tax measures announced, the focus of this Budget is on providing support to working parents and continued monitoring of individual tax compliance.

Personal income tax rates

Despite some conjecture in recent weeks, this Budget has not sought to defer ‘Stage 3’ tax cuts, originally announced in 2018. From 1 July 2024, the 37 percent bracket will be removed entirely, and the 32.5 percent bracket will be reduced to 30 percent. In addition, the threshold above which the top marginal rate of 45 percent applies will increase from $180,000 to $200,000.

Taxable income	                   Current tax rates
Up to $18,200	                                0
$18,201 - $45,000	                      19 percent
$45,001 - $120,000	                      32.5 percent
$120,001 - $180,000	                      37 percent
From $180,001	                              45 percent

Taxable income	                 Tax rates from 1 July 2024
Up to $18,200	                           0
$18,201 - $45,000	              19 percent
$45,001 - $200,000	              30 percent
From $200,001	                      45 percent 

Support for working parents

Australia’s paid parental leave entitlement will be extended by six weeks to a total of 26 weeks (i.e. six months), easing the cost of living for families and reducing barriers to greater workforce participation. The extension will apply in increments of two weeks, starting from 1 July 2024 until it reaches the full 26 weeks, from July 2026.

Prior to the election, the Government committed to a number of changes to the Child Care Subsidy which this Budget confirms. Specifically, the maximum subsidy will be raised to 90 percent for families for the first child in care. Many families with a child currently in care (i.e. those earning less than $530,000) will enjoy increased Child Care Subsidy rates.

Personal Income Taxation Compliance Program

The government’s focus on addressing non-compliance by individual taxpayers remains, with funding allocated for a further two years to support corrective activities targeted at overclaiming of deductions and incorrect reporting of income.