Stage 3 Tax Cuts
Diving into the details of the upcoming Stage 3 tax cuts is essential for every Aussie taxpayer. These cuts aim to streamline the tax system and offer relief from the dreaded bracket creep.
Here's the lowdown on the proposed changes slated for the 2024-25 income year.
Understanding the Shift:
Initially, Stage 3 tax cuts planned to scrap the 37% tax rate for those earning above $120,000 and slash the tax rate to 30% for incomes between $45,000 and $200,000. However, critics argued that this structure favoured higher earners disproportionately.
In response to the feedback and the current economic landscape, Prime Minister Anthony Albanese unveiled a revised plan. This new blueprint promises fairer relief, focusing particularly on low and middle-income earners amid the rising cost-of-living concerns.
2023 – 2024 Current Tax Rate
| Income | Current tax rate |
| $18,200 or less | 0% |
| $18,201 – $45,000 | 19% |
| $45,001 – $120,000 | 32.5% |
| $120,001 – $180,000 | 37% |
| $180,001+ | 45% |
Tax rate after re-designed stage three tax cuts
| Income | Tax rate after re-designed stage three tax cuts |
| $18,200 or less | 0% |
| $18,201 – $45,000 | 16% |
| $45,001 – $135,000 | 30% |
| $135,001 – $190,000 | 37% |
| $190,001+ | 45% |
Impact Analysis:
Under the revamped plan, while high-income earners might witness reduced benefits, the bulk of Aussies—especially those earning around the average wage of $73,000—stand to gain significantly from the tax cuts. The goal? To ensure tax relief reaches those who need it the most.
What Does This Mean for You?
If your income falls under the new tax brackets, fret not—your employer and tax return will automatically apply the revised tax rates. No need for additional paperwork or hassle.
Seeking Guidance?
Wrangling with the ins and outs of the impending Stage 3 tax cuts might seem daunting, but staying informed is key to understanding their impact on your financial landscape. I
f you crave personalised advice or need a guiding hand through these changes, our expert accountants are here to steer you in the right direction.
Reach out to us for tailored assistance, and let's navigate this tax terrain together!
Thank you for reading!
Should you have any queries in regards to the above please contact our office on (03) 9728 1448
The TAS Team
3/653 Mountain Highway, Bayswater VIC 3153
Dorothea Farmakis (CPA)
Director
Dorothea, our CPA Qualified Accountant (Registered Tax Agent), has over 25 years experience within international corporate firms in Accountancy, Funds Management and Asset Management for firms such as HSBC, P&O, Lend Lease and more.
Specialisations
Hospitality
Manufacturing
Real Estate
Agriculture
The information contained in this publication is for general information purposes only, professional advice should be obtained before acting on any information contained herein. The receiver of this document accepts that this publication may only be distributed for the purposes previously stipulated and agreed upon at subscription. Neither the publishers nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication.