Ensure you’re up to date before filing your EOFY returns.
#1: Income tax thresholds
Effective from 31 July 2024, personal income tax thresholds changed. Composite rates to account for this applied for the income year to 31 March 2025.
- 10.5% applies up to $15,600 (previously $14,000)
- 17.5% applies from $15,601 to $53,500 (previously up to $48,000)
- 30% applies from $53,501 to $78,100 (previously up to $70,000)
Check your payroll systems have reflected the composite rates applying from July, to ensure there are no surprises in terms of incorrect PAYE deducted. Double check your systems are set up for the new marginal tax rate thresholds applying from 1 April 2025.
#2: Fringe Benefit Tax (FBT)
With the changes to income tax thresholds, FBT rates also change, with effect from 1 April 2025. If you provide benefits to employees, review your FBT reporting processes and ensure you’re set up to account for the changes.
#3: Resident Withholding Tax (RWT)
RWT rates were also adjusted in line with the new personal tax thresholds as of 31 July 2024. If your business handles interest payments or other transactions requiring withholding tax, check you are using the correct rates.
#4: Independent Earner Tax Credit (IETC)
If you’re a sole trader earning between $24,000 and $70,000, you may qualify for the IETC, which could lower your overall tax liability. Check your eligibility before filing your tax return.
Get in touch if you have any questions – we’ll guide you through it.
