Tax Changes for the New Financial Year
Today marks the start of a new financial year, bringing with it several important changes that could affect individuals and businesses across Australia. From tax rates to minimum wages and superannuation rules, here's what you need to know.
Lower Tax Rates for Income Earners
One of the most significant changes is the reduction in the tax rate for income between $18,201 and $45,000, which will now be taxed at 15 per cent instead of 16 per cent. The tax brackets remain the same, but the rates have been adjusted as follows:
- Taxable income:
- $0 – $18,200: $0
- $18,201 – $45,000: 15 cents for each $1 over $18,200
- $45,001 – $135,000: $4,020 plus 30 cents for each $1 over $45,000
- $135,001 – $190,000: $31,288 plus 37 cents for each $1 over $135,000
- $190,001 and over: $51,638 plus 45 cents for each $1 over $190,000
This change does not include the Medicare levy of 2 per cent. The lower tax rate will benefit everyone earning more than $18,201, not just those in the $18,201 to $45,000 range. This is because income is taxed progressively, meaning different portions of your income are taxed at different rates.
The government estimates that this change will save people earning $45,000 or more approximately $268 per year, which equates to about $5 extra per week.
Minimum Wage Increases
From today, workers on the national minimum wage will see a 5.97 per cent pay rise, while those covered by minimum awards will get a 4.75 per cent increase. These changes apply to shifts worked from today and should be reflected in pay cheques covering this period.
The new national minimum wage is:
- $1,004.90 per week
- $26.44 per hour
This is an increase of $56.90 per week compared to the previous rate of $948 per week or $24.95 per hour. For award-covered workers, the exact increase may vary, so checking Fair Work Australia’s pay calculator is recommended.
Superannuation Payment Changes
Employers are now required to pay their workers’ superannuation contributions at the same time as their wages, ensuring that these contributions reach nominated funds within seven business days. Previously, employers only had to pay super every three months.
This change, announced in 2023, aims to improve retirement savings and ensure compliance with super requirements. Some employers may already be following this practice, so they may not notice any difference.
Paid Parental Leave Extension
Eligible families with a child born or adopted from today will receive an additional 10 days of paid parental leave, increasing the total from 24 weeks to 26 weeks (or 130 days). Single parents can take all their leave, while couples must reserve 20 days for the other partner, up from 15 days previously.
Because the payment is tied to the national minimum wage, the amount has also increased by 5.97 per cent to $1,004.90 per five-day week.
Fuel Excise Reduction
In March, the federal government halved the fuel excise to reduce petrol costs caused by the conflict in the Middle East. The standard fuel excise was 52.6 cents per litre, and the reduction initially cut 32 cents off each litre. However, due to ongoing uncertainty, the discount was extended until August 2 at a reduced rate of 16.4 cents off per litre.
This is expected to cost about an extra $12 per tank for a standard 65-litre car.
Social Security Indexation Increases
Several social security payments and thresholds will see increases from today. These include Family Tax Benefit (Part A and Part B), pension means testing limits, parenting payment means testing limits, Youth Allowance means testing limits, and deeming thresholds.
Energy Price Cuts
The Australian Energy Regulator (AER) has cut the default market offer in certain areas, leading to power price reductions in New South Wales, south-east Queensland, and South Australia. Prices will fall by up to 7.7 per cent in New South Wales, 10.7 per cent in south-east Queensland, and 1.1 per cent in South Australia. However, some customers in South Australia may see a 1.4 per cent increase.
In Victoria, benchmark prices will fall by 5 per cent, but customers should check their plans to ensure they are benefiting from the changes.
Solar Sharer Offer
The Solar Sharer Offer (SSO) is set to launch in New South Wales, South Australia, and parts of south-east Queensland today. Eligible customers will receive up to three hours of free electricity per day, provided they have a smart meter and opt in to the program.
Text Message Regulations
Businesses sending text messages with their name at the top of the message must now register with the SMS Sender ID Register. This move, aimed at combating scams, will block unverified messages and label them as "Unverified."
For more personal finance news, check out the ABC Business Daily podcast, which offers practical tips and insights into upcoming tax changes.
No comments:
Post a Comment