As the new financial year approaches, several significant changes are set to take effect on 1 July 2024. These changes will impact personal income tax, superannuation, and various benefits for both individuals and businesses. Here’s a detailed look at what to expect.
1. Personal Income Tax Cuts
One of the most anticipated changes is the reduction in personal income tax rates along with adjustments to the tax thresholds. This means that Australians will see more of their earnings in their paychecks, providing a welcome relief to many households. Details of the new rates and thresholds are as follows:
Source: Tax cuts to help with the cost of living | Treasury.gov.au
2. Superannuation Guarantee Increase
The superannuation guarantee, which mandates the minimum percentage of earnings that employers must contribute to their employees’ superannuation funds, will rise from 11% to 11.5%. This increase aims to bolster retirement savings for Australian workers. Employees should review their salary package arrangements to understand the impact of this change on their overall compensation.
3. Superannuation Contribution Caps
There will be an increase in the caps for superannuation contributions:
Note: These higher caps will allow individuals to save more for retirement on a tax-advantaged basis.
4. Luxury Car Tax Threshold
The luxury car tax threshold is set to increase, providing some relief to those purchasing higher-end vehicles:
5. Car Limit for Depreciation
The limit on the amount that can be claimed for depreciation on cars will rise to $69,674. This change will benefit those who use vehicles for business purposes, allowing for a higher claim on their tax returns.
6. Energy Relief Credit for Households
To help with rising energy costs, a $300 energy relief credit will be available to households. This credit will be applied automatically on a quarterly basis, reducing energy bills and providing financial relief to families across the country.
1. Energy Relief Credit for Small Businesses
Small businesses will receive a $325 energy relief credit. This is available to those who meet their State or Territory’s definition of a ‘small customer’. The credit aims to alleviate some of the financial pressure from energy costs, helping small businesses maintain profitability and operational efficiency.
2. Instant Asset Write-Off Extension
The popular $20,000 instant asset write-off has been extended to 30 June 2025, pending the passage of legislation. This provision allows businesses to immediately deduct the cost of eligible assets, improving cash flow and encouraging investment in new equipment and technology.
The changes coming into effect on 1 July 2024, present a mix of opportunities and adjustments for both individuals and businesses. From tax cuts and increased superannuation contributions to new thresholds for luxury car tax and energy relief credits, these updates are designed to enhance financial well-being and stimulate economic growth. It’s essential for everyone to review these changes and adjust their financial plans accordingly to maximise the benefits.
Ensure you are fully prepared for the upcoming financial year. Book a free consultation with us today to discuss how these changes will impact you.
3. STP2 Enforcement
The latest round of changes to Single Touch Payroll (STP2) have been in play since July 2024. Our understanding is that many businesses may not have set up items like employee allowances correctly under the new requirements, and that whilst the ATO may have shown some lenience on this previously they will be clamping down. Read more on how to set up STP2 properly in your accounting system.
If you need help with any of these changes or have a question about the impact for your business don’t hesitate to get in touch today.
