On 6 February 2024, the Australian Parliament introduced the Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024, which includes amendments to the income tax rates and thresholds for individuals. The law will go into effect from 1 July 2024. The proposed changes will impact the income year of 2024-25 and subsequent years.

Here are the revised rates and thresholds compared to the existing law:

  • Current Law – For 2024-25 and later income years, the rate of tax on the amount of the taxable income of a resident individual taxpayer that:
    • exceeds AUD 18,200 but does not exceed AUD 45,000 is 19%;
    • exceeds AUD 45,000 but does not exceed AUD 200,000 is 30%; and
    • exceeds AUD 200,000 is 45%.
  • New Law – For 2024-25 and later income years, the rate of tax on the amount of the taxable income of a resident individual taxpayer that:
    • exceeds AUD 18,200 but does not exceed AUD 45,000 is 16%;
    • exceeds AUD 45,000 but does not exceed AUD 135,000 is 30%;
    • exceeds AUD 135,000 but does not exceed AUD 190,000 is 37%; and
    • exceeds AUD 190,000 is 45%.
  • Current Law – For 2024-25 and later income years, the rate of tax on the amount of the taxable income of a non-resident individual taxpayer that:
    • does not exceed AUD 200,000 is 30%; and
    • exceeds AUD 200,000 is 45%.
  • New Law – For 2024-25 and later income years, the rate of tax on the amount of the taxable income of a non-resident individual taxpayer that:
    • does not exceed AUD 135,000 is 30%;
    • exceeds AUD 135,000 but does not exceed AUD 190,000 is 37%;
    • exceeds AUD 190,000 is 45%.
  • Current Law – For 2024-25 and later income years, the rate of tax on the amount of the working holiday taxable income that:
    • does not exceed AUD 45,000 is 15%;
    • exceeds AUD 45,000 but does not exceed AUD 200,000 is 30%; and
    • exceeds AUD 200,000 is 45%.
  • New Law – For 2024-25 and later income years, the rate of tax on the amount of the working holiday taxable income that:
    • does not exceed AUD 45,000 is 15%;
    • exceeds AUD 45,000 but does not exceed AUD 135,000 is 30%;
    • exceeds AUD 135,000 but does not exceed AUD 190,000 is 37%; and
    • exceeds AUD 190,000 is 45%.