With the beginning of a new financial year, now is the perfect time to reset and revisit the financial requirements for both you and your practice.<\/p>\n
Income tax rate changes<\/strong><\/span><\/p>\n From 1 July 2024, the revised Stage 3 tax cuts will take effect. The new personal income thresholds and marginal tax rates will be:<\/p>\n Superannuation guarantee<\/strong><\/span><\/p>\n For those employing staff, the rate of superannuation guarantee continues to increase towards the higher final target rate of 12%.<\/p>\n From 1 July 2024, the applicable superannuation guarantee rate will now be 11.5%.<\/p>\n From 1 July 2025, the applicable superannuation guarantee rate will be 12%.<\/p>\n Superannuation contribution caps<\/strong><\/span><\/p>\n Since their introduction, superannuation contribution caps have periodically increased as a result of indexation.<\/p>\n For the 2025 financial year, the available contribution caps will be:<\/p>\n Superannuation \u2013 unused concessional cap carry forward<\/strong><\/span><\/p>\n From 1 July 2018, the ATO has allowed for additional contributions for unused contribution caps from previous years as a means of maximizing your superannuation contributions.<\/p>\n To be eligible to make additional contributions for unused contribution caps, you must have a total superannuation balance of less than $500,000 (as at 30 June 2024). You can make additional contributions going back for a maximum period of 5 years, after which they expire.<\/p>\n For the 2025 financial year, this will allow you to make contributions for unused contributions dating back to 1 July 2019.<\/p>\n Instant asset write off<\/strong><\/span><\/p>\n Under the recent Budget announcement, the Government has committed to the extension of the instant asset write off until 30 June 2025.<\/p>\n The key requirements for immediate deductibility on any new asset acquisitions include:<\/p>\n A notable exception to the instant asset write off is motor vehicles. Whilst motor vehicles costing less than $20,000 can be immediately deducted, for motor vehicles costing more than $20,000, you will need to continue to consider the ATO car limit to determine what amounts are or are not deductible.<\/p>\n From 1 July 2024, the ATO car limit is $69,674.<\/p>\n Division 293 tax <\/strong><\/span><\/p>\n Has your practice income increased this year? Have you sold an asset or investment and realized a one-off capital gain? Beware you could be up for extra tax.<\/p>\n Division 293 tax is a personal tax applied when your Division 293 income exceeds a certain threshold. For the 2025 financial year, the threshold is $250,000.<\/p>\n Your Division 293 income is made up of taxable income, reportable fringe benefits and net investment losses.<\/p>\n Division 293 tax is assessed on your annual concessional superannuation contributions at a tax rate of 15%. This is in addition to the existing superannuation tax rate of 15% already applied to your contributions.<\/p>\n You can pay your Division 293 tax personally or you make an election with the Australian Taxation Office to pay it from your superannuation account.<\/p>\n <\/p>\n\n\n
\n Income Threshold<\/strong><\/span><\/td>\n Marginal Tax Rate<\/strong><\/span><\/td>\n<\/tr>\n \n Nil – $18,200<\/td>\n Tax free<\/td>\n<\/tr>\n \n $18,201 – $45,000<\/td>\n 16%<\/td>\n<\/tr>\n \n $45,001 – $135,000<\/td>\n 30%<\/td>\n<\/tr>\n \n $135,001 – $190,000<\/td>\n 37%<\/td>\n<\/tr>\n \n > $190,000<\/td>\n 45%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \n
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