Australia Tax Changes — Live Tracker

What changed

The Superannuation Guarantee (SG) rate increased from 11.5% to 12.0% on 1 July 2025, completing the gradual increase that began in 2013. All employers must calculate super contributions at the new 12% rate on ordinary time earnings from 1 July 2025. PAYG withholding is unaffected, but payroll software and manual calculations must be updated. Failure to pay at least the minimum rate triggers the Superannuation Guarantee Charge.

Who it affects

• All Australian employers paying wages to employees
• Business owners paying themselves a salary
• Contractors who may be treated as employees for SG purposes

What to do

Update payroll software to apply 12% from 1 July 2025. Review salary-sacrifice arrangements where the SG increase may affect take-home pay. Confirm your payroll provider has applied the new rate automatically.

What changed

From 1 July 2024, the 19% rate applies to $18,201-$45,000 (unchanged), the 32.5% rate applies to $45,001-$135,000 (extended from $120,000), a new 37% rate applies to $135,001-$190,000, and the 45% rate applies above $190,000 (threshold raised from $180,000). The Low and Middle Income Tax Offset (LMITO) was removed from 2022-23 and does not return. The Low Income Tax Offset (LITO) continues. The changes reduce the tax burden for most middle-income earners.

Who it affects

• All individual Australian taxpayers including sole traders
• Company directors taking a personal salary
• Trust beneficiaries receiving distributions taxed at marginal rates

What to do

Review PAYG withholding schedules from 1 July 2024 using ATO tax tables. If you are a sole trader or receive distributions, update your voluntary PAYG instalment amounts to avoid underpaying.

What changed

The instant asset write-off threshold was extended at $20,000 per asset for small businesses with aggregated annual turnover under $10 million. Assets costing less than $20,000 and first used or installed ready for use between 1 July 2023 and 30 June 2025 can be fully deducted in the year of acquisition. The threshold applies per asset, not in aggregate. Assets costing $20,000 or more enter the general small business pool.

Who it affects

• Small businesses with aggregated annual turnover below $10 million
• Sole traders and companies purchasing eligible depreciating assets
• Businesses acquiring equipment, tools or technology for business use

What to do

Identify eligible assets acquired before 30 June 2025 and claim the deduction in your 2024-25 tax return. Assets must be used or installed ready for use by 30 June 2025. Keep invoices and evidence of business use.

What changed

Single Touch Payroll Phase 2 is fully enforced across all employer sizes. Employers must now report disaggregated payroll data including income type (salary, closely held payee, working holiday maker), country codes for foreign workers, tax treatment codes, and child support deductions. Micro employers with 1-4 employees who relied on deferrals must comply. The ATO is actively reviewing payroll submissions for accuracy and consistency.

Who it affects

• All employers with at least one employee
• Micro employers (1-4 employees) previously granted deferrals
• Businesses with contractors, working holiday makers or closely held payees

What to do

Confirm your payroll software is STP Phase 2 compliant and you are reporting the correct income type and tax treatment codes. Review closely held payee reporting rules if paying family members through the company.

What changed

The ATO has set the Division 7A benchmark interest rate at 8.77% per annum for the 2025-26 income year. Under Division 7A, loans from private companies to shareholders or their associates are treated as unfranked dividends unless a complying loan agreement is in place and interest is charged at no less than the benchmark rate (or the loan is fully repaid by the company's lodgment day). The rate increased from the prior year, reflecting higher market rates.

Who it affects

• Private company shareholders with existing Division 7A loan agreements
• Directors who have borrowed funds from their company
• Trustees of trusts that owe unpaid present entitlements to private companies

What to do

Review all complying Division 7A loan agreements and ensure interest charged is at least 8.77% for 2025-26. Update loan documentation if required. Consider repaying loans in full before the company lodgment day to avoid a deemed dividend.