Personal Tax Rate Changes

The government has announced that there will be new stage 3 tax rate changes that will come into effect on 1 July 2024, as a part of the government’s income tax package, that was introduced in 2018 and legislated in 2019.  

The changes 

The tax rate changes being introduced will see the 32.5% tax bracket decrease to 30%, the 37.5% tax bracket cease to exist, and the threshold for the top bracket increase from $180,000 to $200,000.  

How these changes will affect you 

This means that Australians currently earning between $45,001 and $120,000 will have their taxes cut by up to 2.5%. Those earning between $120,001 and $180,000 will experience a reduction of up to 7.5% in their taxes, while people earning between $180,001 and $200,000 will have their taxes cut by up to 15%, meaning that these tax changes will benefit this group the most.  

Low-income earners will not see a change in their tax rates, those who are paid less than $18,200 will not be taxed, and those between $18,200 and $45,000 will still be taxed 19%. High income earners will also not see a reduction in their marginal taxes, as those earning above $200,000 will still be paying 45%. 

See below examples*: 

*This does not include the Medicare levy