2025 Federal Budget Tax Changes Passed: What They Mean for You
- David Tilley
- Apr 21
- 2 min read
The Federal Government has passed key income tax changes. Here is a summary of the legislated changes and what they mean for you.
Personal Income Tax Cuts
New Tax Thresholds (2026–27)
Taxable Income ($) | Tax Payable ($) |
0 – 18,200 | Nil |
18,201 – 45,000 | Nil + 15% of excess over 18,200 |
45,001 – 135,000 | 4,020 + 30% of excess over 45,000 |
135,001 – 190,000 | 31,020 + 37% of excess over 135,000 |
>190,000 | 51,370 + 45% of excess over 190,000 |
New Tax Thresholds (2027–28)
Taxable Income ($) | Tax Payable ($) |
0 – 18,200 | Nil |
18,201 – 45,000 | Nil + 14% of excess over 18,200 |
45,001 – 135,000 | 3,752 + 30% of excess over 45,000 |
135,001 – 190,000 | 30,752 + 37% of excess over 135,000 |
>190,000 | 51,102 + 45% of excess over 190,000 |
This is a tax saving of $268 over the 2026/27 tax year and $536 over the 2027/28 tax year for all taxpayers earning $45,000 per annum or more.
Medicare Levy Threshold Increases
To provide additional relief to low-income earners, the Medicare levy low-income thresholds have been increased effective 1 July 2024:
Category of Individuals | Current Threshold ($) | New Threshold (2024–25) ($) |
Singles | 26,000 | 27,222 |
Families* | 43,846 | 45,907 |
Seniors and pensioners – Single | 41,089 | 43,020 |
Seniors and pensioners – Families* | 57,198 | 59,886 |
*Thresholds increase by $4,216 for each dependent child or student (up from $4,027).
This will provide a boost to those on low incomes and exempt them from making the payment of 2% Medicare Levy.
Should you wish to understand how these changes will impact your individual or business tax position, please contact our office. We are here to assist you in planning ahead.
