5 Tax and Structures
Federal Budget 2025 Proposals
The 2025 Federal Budget measures are as follows:
Income tax cuts
The Government has announced personal income tax cuts over the next couple of years which are in addition to previous tax cuts announced. The reduced tax rates apply to taxable incomes earned between A$18,201 - A$45,000 where the tax rate will be reduced to:
- 15% from 1 July 2026; and
- 14% from 1 July 2027.
The new tax rates can be illustrated by the following table:
| Taxable income | 2025/2026 | From 1 July 2026 | From 1 July 2027 |
| 0 – $18,200 | 0% | 0% | 0% |
| $18,201 - $45,000 | 16% | 15% | 14% |
| $45,001 - $135,000 | 30% | 30% | 30% |
| $135,001 - $190,000 | 37% | 37% | 37% |
| Above $190,000 | 45% | 45% | 45% |
The Medicare levy low-income thresholds will increase from 1 July 2025:
- The threshold for singles will be increased to $27,222.
- The family threshold will be increased to $45,907.
- For single seniors and pensioners eligible for the SAPTO, the threshold will be increased to $43,020.
- The family threshold for seniors and pensioners eligible for the SAPTO will be increased to $59,886.
- For each dependent child or student, the family income thresholds will be increased from $4027 to $4,216.
Medicare levy surcharge income thresholds and rates for 2025-26 will increase to the following:
| Threshold | Base tier | Tier 1 | Tier 2 | Tier 3 |
| Single threshold | $101,000 or less | $101,001 – $118,000 | $118,001 – $158,000 | $158,001 or more |
| Family threshold | $202,000 or less | $202,001 – $236,000 | $236,001 – $316,000 | $316,001 or more |
| Medicare levy surcharge | 0% | 1% | 1.25% | 1.5% |
The family income threshold is increased by $1,500 for each MLS dependent child after the first child.
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