Changes have been made to provide tax relief for individuals and families. These changes, announced on 30 May, are part of the annual Government Budget 2024.
Changes from 31 July include:
- increasing personal income tax thresholds
- extending the independent earner tax credit
- increasing in-work tax credit and the minimum family tax credit.
Up until 31 July, you can use the Treasury calculator to estimate how your household income might change.
If you're paid salary or wages
In most cases you won't have to do anything. Your employer will adjust your pay. If they don't have everything set up by 31 July, you'll get the extra money either in a later pay or after our end of the year 'square-up process'.
What the changes mean for you
| Current threshold | New threshold 31 July 2024 | Tax rate |
|---|---|---|
| $0-$14,000 | $0-$15,600 | 10.5% |
| $14,001-$48,000 | $15,601-$53,500 | 17.5% |
| $48,001-$70,000 | $53,501-$78,100 | 30% |
| $70,001-$180,000 | $78,101-$180,000 | 33% |
| $180,001 upwards | $180,001 upwards, no change | 39% |
For the 2025 income year (1 April to 31 March 2025), because the change is part way through the year, the annual tax rates and thresholds are composites.
| Taxable income | 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 upwards | 39% |
| Current threshold | New threshold 31 July 2024 | Your entitlement |
|---|---|---|
| $24,000-$44,000 | $24,000-$66,000 | $10 a week or $520 a year |
| $44,001-$48,000 | $66,001-$70,000 | The payment reduces by 13 cents for every dollar you earn |
Customers may not get the full credit this tax year if their income was between $48,000 and $70,000. This is because the threshold only increased part way through the year.
Changes to personal income tax thresholds may affect other types of tax you pay
Secondary tax codes
If you use a secondary tax code, you should check if your yearly PAYE income payments will be in the new threshold. When the new rates apply from 31 July, you may need to change your tax code by completing an IR330 form. Give this form to your secondary income payer.
Resident withholding tax (RWT)
If you have investment income, the RWT rate won't automatically update at your bank or where you have money invested. If after 31 July your rate is wrong, you'll need to let them know which RWT rate to change you to.
Provisional tax
If you pay provisional tax you and/or your tax agent can review your situation and talk about whether you need to estimate or re-estimate.
Tailored tax codes
If you use a tailored tax code we'll recalulate it and send you and your employer a new certificate.
Working for Families payments change on 31 July 2024
Minimum family tax credit (MFTC)
The yearly after-tax income to get MFTC increases from $35,204, ($677 a week) to $35,316, ($679 a week).
In-work tax credit (IWTC)
The base rate for the IWTC increases from $3,770, ($72 a week) to $5070, ($97 a week).
The new rate will update automatically and create a new entitlement period. If you're eligible, you'll get a Notice of Entitlement in either myIR or the post.
Paid parental leave (PPL)
The new tax thresholds have updated. A Notice of Entitlement showing this was issued in late June.
Changes for employers
If you use payroll software, your software provider was given the payroll specifications, casebook and tax tables, and should have provided you with an update.
If you file manually or don't use a software provider, make sure you use the new tax tables in your calculations.
The updated PAYE tax tables and Tax code declaration - IR330 (new teal colour) will be available online from 22 July 2024 and our calculators from 25 July 2024.
Which PAYE tax tables
Use the PAYE tax tables that apply on the day the PAYE income payment is made to your employees.
| Pay period ends | Employees paid on | PAYE tables to use |
|---|---|---|
| 31 July 2024 | 30 July 2024 | 1 April 2024 to 31 July 2024 |
| 31 July 2024 | 31 July 2024 | 31 July 2024 onwards |
| 1 August 2024 | 1 August 2024 | 31 July 2024 onwards |
PAYE extra pays
Until 1 April 2025, for extra pay calculations use the personal income tax thresholds 1 April 2024 to 30 July 2024. Using these rates means less chance of people getting a tax bill at the end of the tax year.
Fringe benefit tax
From 31 July 2024 where benefits are attributed to each employee, a change applies to how FBT is calculated. A new calculation field will be added between tax on remuneration and FBT payable — 'FBT on net income'. To get the tax, this new field takes the net income figure and applies the FBT rates table to it — in the same way that the tax on remuneration field is calculated.
The change only applies to final quarter calculations — 4 January to 31 March, or any quarter that an employer ceases providing fringe benefits.