Tax Update - Key Changes You Should Know
To help individuals and business owners stay informed, we’ve outlined key tax updates recently announced by the ATO - some already in effect, others commencing from 01 July 2026.
These updates may impact both individuals and businesses. We encourage you to review the changes below and consider how they may apply to your situation.
Effective Now or Soon
1. Super guarantee rate increase
From 1 July 2025, the super guarantee(SG) rate will increase from 11.5% to 12%. Employers should ensure payroll systems are updated accordingly.
2. End-of-year finalisation through STP
Employers need to lodge a finalisation declaration for all employees paid and reported through STP during the year by 14 July 2025，so they can access their income statements to lodge their tax return.
3. Personal tax rate change
| Taxable income | Tax on this income |
|---|---|
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 16c for each $1 over $18,200 |
| $45,001 – $135,000 | $4,288 plus 30c for each $1 over $45,000 |
| $135,001 – $190,000 | $31,288 plus 37c for each $1 over $135,000 |
| $190,001 and over | $51,638 plus 45c for each $1 over $190,000 |
4. Taxable Payments Annual Report
Businesses in certain industries need to report payments made to contractors by 28 August 2025. This applies to providers of:
- building and construction services
- cleaning services
- couriers services
- road freight services
- information technology (IT) services
- security, investigation and surveillance service
5. Denying deductions for ATO interest charges
From 1 July 2025, interest charges imposed by the ATO(GIC or SIC) will no longer be tax deductible.
- GIC(General Interest Charge): imposed on unpaid income tax liabilities is incurred on a daily basis.
- SIC (Shortfall Interest Charge): imposed on an unpaid income tax shortfall is incurred in the year you are served a notice of amended assessment.
Any GIC or SIC incurred on or after 01/07/2025 is not deductible.
6. Small Business Support - $20,000 instant asset write-off
Eligible small business (with an annual turnover<$10 million) can immediately deduct the cost of eligible assets under $20,000 if:
- First used or installed for use between 1 July 2024 and 30 June 2025; or
- Additional second element costs incurred within the same period , provided the original asset was already written off under simplified depreciation rules and the new cost is under $20,000.
Effective on or after 01 July 2026
1. Personal Income Tax Cuts
To ease the cost-of-living burden on Australian taxpayers and ensure that Australians keep more of what they earn, the Government will gradually reduce personal income tax rates for certain income thresholds.
The new tax cuts will apply from:
- 1 July 2026: 16% rate reduced to 15%
- 1 July 2027：15% rate reduced to 14%
| Thresholds ($) | Rates in 2024–25 and 2025–26 (%) | Rates in 2026–27 (%) | Rates in 2027–28 (%) |
|---|---|---|---|
| 0 – 18,200 | Tax free | Tax free | Tax free |
| 18,201 – 45,000 | 16 | 15 | 14 |
| 45,001 – 135,000 | 30 | 30 | 30 |
| 135,001 – 190,000 | 37 | 37 | 37 |
| >190,000 | 45 | 45 | 45 |
2. Payday Super (Not Yet Law)
Announced on 2 May 2023, this proposed measure will require employers to pay employees super at the same time as wages, starting 1 July 2026.
This measure is not yet law.
Need Help?
If you would like more information or to discuss how these changes may apply to your situation, feel free to contact our office on (03) 9686 0808.
