Over the last few years both the Coalition and Labor governments announced income tax cuts that have been applied in stages since 2018, including changes (known as the stage 3 tax cuts) that apply from July 2024. These changes are now law after passing both houses of parliament on 27 February 2024.

The changes that apply from 1 July 2024 are:

  • The bottom tax rate decreases from 19% to 16%
  • The 32.5% tax rate decreases to 30%
  • The threshold above which the 37% tax rate applies increases from $120,000 to $135,000
  • The threshold above which the top 45% tax rate applies increases from $180,000 to $190,000.

The income tax brackets and rates for Australian residents for next financial year and subsequent financial years are listed below.

Australian income tax rates for 2024–25 onwards (residents)

Income thresholds Rate Tax payable on this income
$0 – $18,200 0% Nil
$18,201 – $45,000 16% 16c for each $1 over $18,200
$45,001 – $135,000 30% $4,288 plus 30c for each $1 over $45,000
$135,001 – $190,000 37% $31,288 plus 37c for each $1 over $135,000
$190,001 and over 45% $51,638 plus 45c for each $1 over $190,000
Note: The above amounts do not include Medicare Levy or the impact of tax offsets such as the Low Income Tax Offset (LITO).
 

Tax cuts from 1 July 2024

The table below lists the approximate tax cut for various income levels from 1 July 2024 compared to previous years.

Income 2023-24 tax paid 2024-25 tax paid Tax cut
$20,000 $342 $288 $54
$30,000 $2,242 $1,888 $354
$40,000 $4,142 $3,488 $654
$50,000 $6,717 $5,788 $929
$60,000 $9,967 $8,788 $1,179
$70,000 $13,217 $11,788 $1,429
$80,000 $16,467 $14,788 $1,679
$90,000 $19,717 $17,788 $1,929
$100,000 $22,967 $20,788 $2,179
$110,000 $26,217 $23,788 $2,429
$120,000 $29,467 $26,788 $2,679
$130,000 $33,167 $29,788 $3,379
$140,000 $36,867 $33,138 $3,729
$150,000 $40,567 $36,838 $3,729
$160,000 $44,267 $40,538 $3,729
$170,000 $47,967 $44,238 $3,729
$180,000 $51,667 $47,938 $3,729
$190,000 $56,167 $51,638 $4,529
$200,000 $60,667 $56,138 $4,529

Note: The above amounts do not include Medicare Levy or the impact of tax offsets such as the Low Income Tax Offset (LITO).

 

Australian income tax rates for 2023–24 (residents)

Income thresholds Rate Tax payable on this income
$0 – $18,200 0% Nil
$18,201 – $45,000 19% 19c for each $1 over $18,200
$45,001 – $120,000 32.5% $5,092 plus 32.5c for each $1 over $45,000
$120,001 – $180,000 37% $29,467 plus 37c for each $1 over $120,000
$180,001 and over 45% $51,667 plus 45c for each $1 over $180,000
Note: The above amounts do not include Medicare Levy or the impact of tax offsets such as the Low Income Tax Offset (LITO).
 

Medicare Levy surcharge income thresholds

The Medicare Levy surcharge (MLS) thresholds are as follows:

Tiers for 2023–24 Income threshold
for individuals		 Income threshold
for families		 Income threshold
for families
Tier 0 Up to $93,000 Up to $186,000 0%
Tier 1 $93,001 – $108,000 $186,001 – $216,000 1%
Tier 2 $108,001 – $144,000 $216,001 – $288,000 1.25%
Tier 3 $144,001 and above $288,001 and above 1.50%
 
 
Source: ATO
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