The changes to personal income tax rates taking effect in July, as an outcome of the Budget 2024, have some consequences for businesses. The current thresholds apply for the first 3 months and 30 days of the 2024–25 tax year; the new thresholds for the remaining period. For the 2024-25 year only, composite tax rates apply:
| Taxable Income | Composite tax rate |
| 0 – $14,000 | 10.5% |
| $14,001 – 15,600 | 12.82% |
| $15,601 – 48,000 | 17.5% |
| $48,001 – 53,500 | 21.64% |
| $53,501 – 70,000 | 30% |
| $70,001 – 78,100 | 30.99% |
| $78,101 – 180,000 | 33% |
| $180,001 | 39% |
Ensure your payroll providers make the necessary system changes for 31 July.
The changes also affect fringe benefit tax (FBT), employer superannuation contribution tax (ESCT), retirement scheme contribution tax, RWT and prescribed investor rates.
The new thresholds for FBT effectively apply from 1 April 2025 (noting that for the year beginning 1 April 2024 a new attribution method formula effectively accounts for the newly introduced income tax thresholds):
| Range of dollar in all-inclusive pay | Tax rate |
| 0 – $13,962 | 11.73% |
| $13,936 – 45,230 | 21.21% |
| 45231 – 62,450 | 42.86% |
| $62,450 – 130,723 | 49.25% |
| $107,234+ | 63.93% |
The proposed thresholds for ESCT applying from 1 April 2025 are:
| ESCT threshold amount | Tax rate |
| 0 – $18,720 | 10.50% |
| $18,721 – $64,200 | 17.50% |
| $64,201 – 93,720 | 30% |
| $93,721 – 216,000 | 33% |
| $216,001+ | 39% |
RWT is affected from 31 July 2024. Taxpayers who pay RWT on interest and dividend income should consider whether they should change their elected RWT rate to align with increases to the personal income tax threshold.
Contact us if you would like to discuss the impact on your business systems, including your FBT programme. If you earn interest or dividends or if you pay business related interest to family and friends, please talk to us.
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