Proposed Changes to Stage 3 Tax Cuts Announced
CoggerGurry • February 16, 2024
It’s been hard to miss news of the Government’s broken promise on stage 3 tax cuts, legislated to take effect from 1 July 2024. Cost of living pressure has driven the change to redistribute the savings to direct more into the hands of low- and middle-income earners.
For those earning approximately between $40,000 and $145,000 you will be better off under the proposed cuts. An average income earner of $80,000 would receive $1,679 in savings versus the already legislated cuts of $875. The impact on high income earners is more pronounced with earnings above $200,000 will have their tax saving almost halved from $9,075 to $4,529.
If you are concerned about the impact on your position or want to know more contact us a CoggerGurry today.
| What was originally legislated from 1 July 2024 | ||
|---|---|---|
| Taxable Income | Marginal Tax Rate | Tax Amount |
| 0 to $18,200 | Nil | Nil |
| > $18,201 to $45,000 | 19% | 19c for each $1 over $18,200 |
| > $45,001 to $120,000 | 32.50% | $5,092 plus 325c for each $1 over $45,000 |
| > $120,001 to $180,000 | 37% | $29,467 plus 37c for each $1 over $120,000 |
| $180,001 and above | 45% | $51,667 plus 45c for each $1 over $180,000 |
| New Updated Propose Stage 3 Tax Cuts | ||
|---|---|---|
| Taxable Income | Marginal Tax Rate | Tax Amount |
| 0 to $18,200 | Nil | Nil |
| > $18,201 to $45,000 | 16% | 16c for each $1 over $18,200 |
| > $45,001 to $135,000 | 30% | $4,288 plus 30c for each $1 over $45,000 |
| > $135,001 to $190,000 | 37% | $31,288 plus 37c for each $1 over $135,000 |
| $190,001 and above | 45% | $51,638 plus 45c for each $1 over $190,000 |
Our office will be closed for the Easter Holiday from Friday the 18th till Monday the 21st April, reopening on Tuesday the 22nd April 2025 Everyone here at CoggerGurry would like to wish you all a safe and happy Easter break
Our office will be closed for the Easter Holiday from Friday the 18th till Monday the 21st April, reopening on Tuesday the 22nd April 2025 Everyone here at CoggerGurry would like to wish you all a safe and happy Easter break
The 2025–26 Federal Budget has reinforced the Albanese Government’s commitment to tax compliance, with a major boost in funding to the ATO to strengthen enforcement—including Fringe Benefits Tax (FBT). With that extra funding comes increased ATO scrutiny on employers. If you're responsible for FBT compliance, now’s the time to get your house in order. High-Risk Areas Under the ATO Microscope : 🚗 Car Fringe Benefits Incorrect vehicle classification (especially dual cab utes and SUVs). Invalid or poor-quality logbooks. Incorrectly treating private use (e.g. home to work, errands) as business use. Misuse of the statutory formula method. 🍽️ Meals & Entertainment Misunderstanding what qualifies as deductible vs. entertainment. Inadequate documentation for functions or staff events. Incorrect application of the "otherwise deductible" rule. ⚡ Electric and Plug-in Hybrid Vehicles From 1 April 2025 , PHEVs lose their FBT exemption unless: The car was in use before 1 April 2025, and There is a binding agreement to continue use post-1 April. Many employers are still unaware of these transitional rules. 🚨 What the ATO Is Watching Nil or non-lodged returns where fringe benefits were likely provided. Incorrect treatment of employee contributions . Mismatches between FBT and income tax reporting. Penalties can be up to 75% of the shortfall , so it pays to be proactive. ✅ What You Should Do Review the benefits you've provided in the 2025 FBT year. Reassess logbooks, vehicle use, and entertainment records. Seek advice on grey areas like PHEVs or meal benefits. Lodge and pay on time. 📞 Need help reviewing your FBT exposure before the deadline? Get in touch today—we’re here to help you stay compliant and penalty-free. Read more about this on our website HERE or give us a call on 03) 5571 0111 📅 Key FBT Dates for 2025 FBT year ends : 31 March 2025 Lodgment due (paper) : 21 May 2025 Lodgment due (tax agent) : 25 June 2025 Payment due : 28 May 2025
