The 2024 Federal Budget was announced on 14 May 2024, with a focus on cost-of-living relief (again) and clean energy.
The previously announced Stage 3 Income Tax Cuts were confirmed to begin on 1 July 2024. Here is a brief summary of the Budget updates.
Businesses
- Small Business Instant Asset Write Off: Small businesses, with an aggregated turnover of less than $10 million, will continue to be able to immediately deduct the cost of eligible assets costing less than $20,000 until 30 June 2025. This is a tax deduction and not $20,000 cash back to you.
- Small Business Energy Rebate: The Government will provide a $325 energy rebate to eligible small businesses on their 2024/25 energy bills to provide cost of living relief. This won’t be a cash payment – but it will be a quarterly payment to your energy company by the Government.
Individuals
- Household Energy Rebate: The Government will provide a $300 rebate to all Australian households on 2024/25 energy bills to provide cost of living relief. This will be a $75 quarterly payment to your energy company by the Government.
- Medicare Levy Low-Income Thresholds Increased: The Government will increase the Medicare Levy low-income threshold for everyone from 1 July 2023. This means all individuals will now pay slightly less tax.
- Revised Stage 3 Tax Cuts for Individuals: The Government confirmed the revised Stage 3 Tax Cuts will begin on 1 July 2024. The 19% tax rate for incomes between $18,201 and $45,000 will be reduced to 16%, and the 30% tax rate will apply to incomes between $45,001 and $135,000. Learn more
- Deeming Rate Freeze Extended: The deeming rate is the Government’s assumed return on a retiree’s investments The top rate of deeming will be held at 2.25% for another 12 months. Half a million pensioners can relax, the deeming rate is staying unchanged for next year.
Superannuation
- Increased Employer Super: While this isn’t a Budget announcement, this is a good opportunity to remind you that as an employer you are required to pay 11.5% of your staff’s salary (up from 11%) into your superannuation from 1 July 2024. If your employee has a salary package that is inclusive of super, then their take-home pay effectively reduces by 0.5% from 1 July 2024. But remember this will be offset by the Stage 3 personal tax cuts also coming into effect on 1 July 2024.
- New Super Contribution Caps: While there were no superannuation reforms contained in this year’s Budget, the super contribution caps were given an inflation adjustment. The tax-deductible super cap will increase from $27,500 to $30,000 on 1 July 2024. The non-tax-deductible super cap will increase from $110,000 to $120,000 per year. You will be able to contribute $2,500 more into super as a tax deduction from 1 July 2024.
Learn more: Changes to superannuation contribution caps
To maximise the benefits from the 2024 Federal Budget, schedule your 2024 Tax Planning meeting with our KMT advisers today!
About our advisers:
Michael Fox has been dedicated to the success of his clients, devising comprehensive wealth strategies for both personal and business growth for over 4 decades. With extensive expertise in business governance and family business succession, Michael specialises in empowering emerging businesses and family enterprises by fostering renewal, enhancing value and smooth transitions to the next generation. Please do not hesitate to reach out if you need assistance with your business strategies.
Chrisanthe Lekatis is renowned for her expertise in management accounting, virtual CFO services, and top-tier business advice. She empowers management with tailored strategies for success, streamlining processes to achieve efficient and cost-effective outcomes. Her commitment to building trust and lasting relationships goes beyond professional excellence; it’s a personal ethos. By actively listening and understanding her clients’ businesses and goals, Chrisanthe thrives on collaborative efforts to navigate challenges and collectively achieve their aspirations. Please do not hesitate to reach out if you need tax assistance.
