As the 2024–2025 financial year begins, a suite of legislative tax changes will impact individuals, small businesses, and superannuation funds across Australia. Whether you’re a wage earner, sole trader, or employer, understanding these updates is essential for compliance and tax efficiency.
Revised Personal Income Tax Rates Take Effect
From 1 July 2024, the government has implemented a revised personal income tax framework designed to deliver broader relief to low and middle-income earners. The headline changes include a lower marginal rate for incomes up to $135,000 and an expansion of the middle-income bracket.
| Taxable Income | Tax Payable |
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,288 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,288 plus 37c for each $1 over $135,000 |
| $190,001 and above | $51,638 plus 45c for each $1 over $190,000 |
These changes represent a structural shift from the previous 2023–24 brackets, notably lowering the 19% rate to 16% and reducing the 32.5% marginal rate to 30% while expanding the threshold for the latter from $120,000 to $135,000.
20% HECS-HELP Debt Reduction
One of the most widely welcomed reforms this year is the government’s move to ease student debt. Effective 1 June 2025, a one-time 20% reduction will be applied to the outstanding balance of all study and training support loans (including HECS-HELP), pending legislative passage.
Additional reforms include:
- Lower indexation: Only 3.2% indexation already applied in 2025 financial year
- Raised repayment threshold: The minimum income threshold for repayments will increase to $67,000 in 2025–26 (currently $54,435 in FY2024–25)
These changes are expected to benefit over 3 million Australians.
$20,000 Instant Asset Write-Off Extended
Small businesses with an aggregated turnover of less than $10 million can continue to take advantage of the $20,000 instant asset write-off for eligible depreciating assets first used or installed by 30 June 2025.
Key points:
- The threshold applies per asset
- Assets must be installed and ready for use by 30 June 2025
- Assets costing $20,000 or more can still be depreciated via the simplified depreciation pool
This measure supports cash flow and capital investment during a period of continued economic adjustment.
Superannuation Guarantee Rates Rises to 12%
From 1 July 2025, employers must increase the Superannuation Guarantee (SG) rate to 12% of ordinary time earnings. This is the final legislated step in a series of incremental rises that began in 2013.
Importantly:
- The 12% SG rate applies to all eligible payments made on or after 1 July 2025
- Employers must update payroll systems and budgets accordingly
No More Tax Deductions for ATO Interest
From 1 July 2025, general interest charges (GIC) and shortfall interest charges (SIC) imposed by the ATO will no longer be deductible for income tax purposes.
Previously, businesses could deduct these charges as a cost of managing their tax obligations. This change will increase the cost of non-compliance and late payment, especially for businesses already under financial strain.
Final Thoughts
This year’s updates reflect a focus on cost-of-living relief, youth debt reduction, and fiscal discipline. For individuals, the changes mean real income gains via reduced tax and HECS burdens. For businesses, proactive planning will be needed to manage new payroll obligations and asset investments.
At Kennedy Tax & Business Services, we help clients translate legislative updates into meaningful strategy. If you would like to discuss how these changes affect you or your business, contact our office for tailored guidance.
This article is for general information purposes only and does not constitute legal or financial advice. For specific advice, speak with a qualified tax professional.
