Some important changes are coming from 1 July 2024, and they could impact you and your business. Read on to find out how these updates might affect you and what you need to know to stay ahead of the game.
Individual Tax Rates
From 1 July 2024, individual tax rates in Australia are getting a makeover. We’ve summarised the key points for you here:
Lower Tax Rates
- The 19% tax rate drops to 16%.
- The 32.5% tax rate falls to 30%.
New Income Thresholds
- The 37% tax rate kicks in at $135,000 (up from $120,000).
- The top 45% tax rate starts at $190,000 (up from $180,000).
These changes are all about giving you some tax relief and helping with the cost of living. For more details, check out the Australian Taxation Office and Treasury websites.
Minimum Wages
Good news for workers! Starting 1 July 2024, the Fair Work Commission has approved a 3.75% bump in the National Minimum Wage and award wages.
- New National Minimum Wage: $915.90 per week or $24.10 per hour.
- Award Wages: Minimum wages under various awards will also go up by 3.75%.
This increase is designed to better support employees and keep up with the cost of living.
Superannuation
From 1 July 2024, the Superannuation Guarantee (SG) rate goes up from 11% to 11.5%.
- Employers will contribute 11.5% of your ordinary time earnings to your super fund.
- This rate will rise again to 12% on 1 July 2025.
- Concessional Contributions Cap: Jumps from $27,500 to $30,000 per year.
- Non-Concessional Contributions Cap: Rises from $110,000 to $120,000 per year.
These changes aim to boost your retirement savings.
Payroll Tax
Victoria’s payroll tax rates and thresholds are also getting a shake-up, starting 1 July 2024.
- Payroll Tax-Free Threshold: Increases from $700,000 to $900,000 for annual returns and from $58,333 to $75,000 for monthly returns.
- Further Increase: Rises to $1,000,000 from 1 July 2025.
- Payroll Tax Deduction: Reduced and phased out at 45% for businesses with annual taxable wages between $3,000,000 and $5,000,000 for the 2024-25 financial year, and 50% from 1 July 2025.
- COVID Debt Levy: Continues until 30 June 2033, adding a 0.5% payroll tax surcharge on businesses with wages over $10 million, and another 0.5% for those over $100 million.
Overtime Meal Allowance
From 1 July 2024, the ATO has increased the overtime meal allowance rate to $35.65 per meal.
- Allowance Use: For meals bought during overtime work, as per an industrial award or enterprise agreement.
- Reasonable Amount: Claims within this amount don’t need detailed receipts, but you must prove the expense was incurred.
- Documentation: Full receipts required if claiming more than the reasonable amount.
This update helps keep meal allowances in line with living costs.
Depreciation & Instant Asset Write-Off
From 1 July 2024, the instant asset write-off threshold will be extended and remain at $20,000.
- Eligibility: Small businesses with an annual turnover of less than $10 million can immediately deduct the cost of eligible assets under $20,000.
- Depreciation Pool: Assets $20,000 or more can be added to the small business depreciation pool, depreciated at 15% in the first year and 30% thereafter.
- Write-Off: Pool balances under $20,000 at the end of the year can be written off.
Motor Car Cost Limit
From 1 July 2024, the car cost limit will rise to $69,674 for the 2024-25 financial year. This limit represents the maximum value that can be used to calculate the depreciation deduction for cars used for business purposes. If a car is purchased above this value, the depreciation deduction is capped at this limit
- Depreciation Deduction: This limit is the maximum value that can be used to calculate the depreciation deduction for cars used for business purposes. The max value for calculating car depreciation is capped at this limit.
- GST Credit: The max GST credit claimable is one-eleventh of the car limit, or $6,334 for the year.
Motor Vehicle Deductions – Cents per km Method
From 1 July 2024, the ATO has bumped up the cents per kilometre rate for work-related car expenses to 88 cents per kilometre.
- Eligibility: Applies to cars carrying less than one tonne and fewer than nine passengers.
- Claim Limit: Up to 5,000 business kilometres per car, per year.
- No Written Evidence Needed: Detailed records aren’t necessary, but a log book is advisable to back up your claims.
- Covered Expenses: Includes fuel, maintenance, insurance, and depreciation.
This increase helps cover the rising costs of vehicle operation, making it easier for you to claim car expenses.
Stay informed and make sure you’re ready for these changes starting 1 July 2024!
Need a hand?
If you’re curious about anything in this article please reach out to our team at [email protected] for assistance. We’re here to help you navigate these updates smoothly.
