Tax cuts for every taxpayer
Tax cuts are here
All Australians are feeling cost-of-living pressures.
That’s why the Australian Government has provided a tax cut to all 13.6 million Australian taxpayers from 1 July 2024.
All Australian taxpayers are now receiving a tax cut.
The Australian Government has made changes to individual income tax rates and thresholds.
From 1 July 2024
- the 19 per cent tax rate was reduced to 16 per cent
- the 32.5 per cent tax rate was reduced to 30 per cent
- the 37 per cent tax threshold was increased from $120,000 to $135,000
- the 45 per cent tax threshold was increased from $180,000 to $190,000.
These changes deliver a tax cut to every Australian taxpayer.
Estimate your tax cut
Enter your annual taxable income to see your annual tax cut.
About the tax cuts
What is a tax cut?
Tax cuts are a change to individual income tax rates and thresholds which result in a reduction in a taxpayer’s tax liability (the amount of individual income tax a person needs to pay).
This is different from a tax refund, which is the money you receive back from the Australian Taxation Office (ATO) if you paid more tax than you need to when you submit your tax return at the end of a financial year.
When will I receive my tax cut?
New individual income tax rates and thresholds apply to all taxable income you earn from 1 July 2024.
For most taxpayers, your tax cut will be reflected in your take-home pay, each payday.
Some taxpayers will receive their tax cut when a tax return is lodged and processed after the end of the 2024‑25 financial year.
These tax cuts do not impact your 2023‑24 tax return.
How will I receive my tax cut?
If you’re an employee, your employer will update the amount of Pay As You Go withholding (PAYG) tax they withhold from your pay, each payday.
Check your payslip, and if you are still not sure if you are receiving your tax cut, ask your employer if they are using the new withholding tax rates.
Employers need to use the new rates and tax tables from 1 July 2024. New tax tables are available from ato.gov.au/taxtables.
New individual tax rates and thresholds for 2024–25
This table compares the individual income tax rates and thresholds for 2023–24 with the new tax rates and thresholds for 2024–25.
| Thresholds in 2023–24 ($) | Rates in 2023–24 (%) |
|---|---|
| 0 – 18,200 | Tax free |
| 18,201 – 45,000 | 19 |
| 45,001 – 120,000 | 32.5 |
| 120,001 – 180,000 | 37 |
| Over 180,000 | 45 |
| Thresholds in 2024–25 ($) | Rates in 2024–25 (%) |
|---|---|
| 0 – 18,200 | Tax free |
| 18,201 – 45,000 | 16 |
| 45,001 – 135,000 | 30 |
| 135,001 – 190,000 | 37 |
| Over 190,000 | 45 |
How do income tax rates and thresholds work?
If you are an Australian taxpayer, you are entitled to the tax-free threshold of $18,200. This means you can earn up to $18,200 each year without paying tax.
If you earn between $18,201 and $45,000:
- your first $18,200 remains tax free, and
- you will pay 16 cents tax on every dollar you earn between $18,201 and $45,000.
If you earn between $45,001 and $135,000:
- your first $18,200 remains tax free, and
- you will pay 16 cents tax on every dollar you earn between $18,201 and $45,000, plus
- 30 cents tax on every dollar you earn between $45,001 and $135,000.
If you earn between $135,001 and $190,000:
- your first $18,200 remains tax free, and
- you will pay 16 cents tax on every dollar you earn between $18,201 and $45,000, plus
- 30 cents tax on every dollar you earn between $45,001 and $135,000, plus
- 37 cents tax on every dollar you earn between $135,001 and $190,000.
If you earn over $190,000:
- your first $18,200 remains tax free; and
- you will pay 16 cents tax on every dollar you earn between $18,201 and $45,000, plus
- 30 cents tax on every dollar you earn between $45,001 and $135,000, plus
- 37 cents tax on every dollar you earn between $135,001 and $190,000, plus
- 45 cents tax on every dollar you earn above the $190,000 threshold.
Certain taxpayers, such as low-income taxpayers and senior Australians may also be eligible for tax offsets that directly reduce their final tax liability.
For more information on paying tax on your income, visit the Australian Taxation Office website.
More support for Australians
The Australian Government has expanded its support to help people in more ways. In addition to tax cuts for every taxpayer, households and eligible small businesses will receive energy bill relief and changes to student loans will reduce student loan debt. For more information on these supports visit supportingaustralians.gov.au.
Cost‐of‐living support
Helping with the cost of living
The Australian Government recognises that many households are facing cost-of-living pressures. The Government has delivered tax cuts for all Australian taxpayers.
Helping Priya
Priya lives in regional Australia. She earned $90,000 and paid $21,517 income tax, including the 2 per cent Medicare levy in 2023–24. On the same salary, Priya will get an annual tax cut of $1,929 in 2024–25. Priya's tax cut will be reflected in her take-home pay, each payday.
This is a fictional example and does not represent any of the people depicted on this website.