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Stage 3 Personal Tax Cuts Now Law!

CoggerGurry • March 12, 2024

The much-discussed stage 3 personal tax cuts have now passed through Parliament and become law, receiving royal assent on 5 March 2024.  These new measures modify the personal tax rates and thresholds for the 2024-25 financial years onwards.   


Cost of living pressure has driven the change to redistribute the savings to direct more into the hands of low and middle-income earners.  Analysis by Treasury shows the redesigned personal tax cuts will spread the benefit of the tax cuts more evenly so regardless of your income you should receive a tax cut of between 1.5 to 2.5 per cent of taxable income (see chart below). 

Source: Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 [and] Treasury Laws Amendment (Cost of Living – Medicare Levy Bill 2024), Treasury Parliament of Australia, (Bills Digest No. 42, 2023-24) 26 February 2024


It is important for individuals to understand that if you are a salary/wage earner these tax cuts will be built into the PAYG Withholding tax that your employer withholds on your behalf.  This will mean more money in your regular pay cheque throughout the year and not as a lump sum when lodging your tax return.   


The tables below show tax rates and thresholds that you can expect to pay in tax for the current year 2023-24 and next financial year 2024-25.

Superannuation Rate Increase – What Employers Need to Know

By Cogger Gurry • February 13, 2025
A quick reminder for all employers: the Superannuation Guarantee (SG) rate is set to increase. Currently, you’re required to contribute 11.5% of your employees' ordinary time earnings (OTE) to their super. However, from 1 July 2025 , this will rise to 12% . Super contributions must be paid at least quarterly to eligible employees, so now is the time to plan for this change and ensure your payroll systems are updated. Stay ahead of the update and keep your business compliant. Did you know we also offer Bookkeeping and Payroll Support ? Call us today to discuss how we can help 03 5571 0111

HOW TAX WORKS IN AUSTRALIA’S SUPERANNUATION SYSTEM

By Cogger Gurry • February 13, 2025
Australia’s super system plays a vital role in ensuring financial security for individuals in retirement. However, how superannuation is taxed can appear complex. In Australia, superannuation is taxed at three main points: contributions, investment earnings and withdrawals. This structure is known as a TTE (taxed, taxed, exempt) system: contributions to the superannuation fund are taxed and the investment earnings within the fund are also taxed, but withdrawals made during retirement are generally exempt from tax. That is, in Australia’s system: Contributions, including those made by employers under the super guarantee (SG) and voluntary concessional contributions, are taxed at a concessional rate of 15%. This is lower than the rates that apply to most other forms of income, providing a tax advantage. Earnings generated from fund investments during the accumulation phase are also taxed at a flat rate of 15%. This is beneficial because it’s lower than the tax rates that typically apply to investment income earned outside of superannuation. Withdrawals made during retirement are generally tax-free. This is intended to enhance the appeal of building super savings over your working life, ensuring you have a tax-effective income stream in retirement. Call us today to discuss your superannuation with one of our experts 03 5571 0111

ATO LAUNCHES ITS SMALL BUSINESS FOCUS AREAS FOR 2025

By Cogger Gurry • February 13, 2025
Staying on top of the ATO’s focus areas for 2025 will help your business stay compliant and avoid unnecessary stress. The ATO has highlighted key areas where businesses often make mistakes, so you can take proactive steps to manage your tax responsibilities. Keep Business and Personal Finances Separate Your business’s money and assets should not be treated as your personal funds. Using company money for personal expenses without proper documentation can lead to issues with the ATO. If you take money from your business, it may be treated as a loan that needs to be properly recorded and repaid with interest. If not managed correctly, this can result in unexpected tax bills or penalties. Claim Deductions and Concessions Correctly Many small businesses make mistakes when claiming tax deductions and concessions. The ATO is paying close attention to how businesses apply for small business capital gains tax (CGT) concessions and report business losses. If you’re claiming a deduction, ensure you meet all the requirements to avoid having to pay back incorrectly claimed amounts or facing penalties. Follow the Tax Rules The ATO is cracking down on businesses that under-report income, over-claim expenses, or use business funds for personal spending. Poor record-keeping and cash flow management can also raise red flags. Good financial habits will help you stay compliant and avoid unnecessary scrutiny. For more information from the ATO, read the full details here
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