We are all feeling the rising cost of living. And we have all been hearing a lot about the tax cuts that will help us all that come into effect on the first of July 2024.
But what exactly do these tax cuts involve and how do they help us?
Good question!
The Australian Taxation Office (ATO) has set up a dedicated website where you can easily understand how these tax cuts will affect your wallet. Simply go to taxcuts.gov.au to use their handy calculator and get personalised insights.
So, what’s changing with these tax cuts?
- Lower Tax Rates: The 19% tax rate will drop to 16%, putting more money back in your pocket.
- Reduction in Middle Tax Bracket: The 32.5% tax rate will be reduced to 30%, providing relief for those in the middle-income bracket.
- Higher Thresholds: The threshold for the 37% tax rate will increase from $120,000 to $135,000, meaning more people will pay a lower rate of tax on their earnings in this bracket.
- Increased Top Threshold: The threshold for the 45% tax rate will rise from $180,000 to $190,000, allowing individuals to earn more before hitting the top tax rate.
These changes are designed to ensure that every Australian taxpayer, regardless of their income level, receives a tax cut.
In essence, these tax cuts mean more money in your pocket, helping to ease the burden of everyday expenses. Whether you’re a low-income earner, a middle-income worker, or someone in the higher brackets, these changes are designed to positively impact your financial situation.
If you use Xero or MYOB these tax updates should automatically update in your payroll but it is worth checking before you do your first pay run in the new financial year.
If you have any questions or concerns about the new tax cuts give us a call on 07 5536 3755.
