✍️ Australian Tax Rates 2025: Everything You Need to Know

Australia’s income tax system underwent a significant transformation starting from 1 July 2024, marking the beginning of the 2024–25 financial year. The tax cuts and adjustments, announced by the Australian Government and the Australian Taxation Office (ATO), will directly impact all taxpayers—whether you’re an employee, self-employed, or an investor.

In this article, we’ll break down the 2025 Australian income tax rate changes, compare them with previous rates, explain how these changes could affect you, share practical tax-saving strategies, and answer frequently asked questions.

🔍 What Are the New Australian Tax Rates for 2025?

From 1 July 2024, the following income tax rates apply to Australian residents:

Taxable Income	Tax Rate
$0 – $18,200	No tax
$18,201 – $45,000	16% on amount over $18,200
$45,001 – $135,000	$4,288 plus 30% on amount over $45,000
$135,001 – $190,000	$31,288 plus 37% on amount over $135,000
$190,001 and above	$51,638 plus 45% on amount over $190,000

⚠️ Note: The Medicare Levy (2%) continues to apply separately.

👉 Key Change: The previous 32.5% tax bracket has been abolished. Instead, income between $45,001 and $135,000 is now taxed at 30%, offering tax relief to middle-income earners.

🎥 Prefer watching over reading?

Check out our video summary below, where we break down the 2025 Australian income tax rate changes, refund scenarios, and smart tax-saving strategies — all in under 5 minutes.

👇 Watch now! 👇

💡 How Will the 2025 Tax Changes Affect You?

The impact of these tax changes will vary depending on your income level and employment type.

✅ Employees (Salary/Wage Earners):If your annual income falls between $45,000 and $135,000, you’ll likely benefit from lower taxes and higher take-home pay.

✅ Self-Employed and Business Owners:If your taxable income is within this range, it’s essential to review your tax planning strategy, especially regarding expense timing and deductions.

✅ Investors:With changes to taxable income brackets, you may need to reassess capital gains tax (CGT) strategies and asset sale timing to align with the new tax rates.

👉 Want to see how much you’ll save? Use our [Free Tax Calculator].

📝 2025 Tax-Saving Strategies

To maximise the benefits of the tax cuts, consider the following tax strategies:

1. Make Additional Superannuation ContributionsReduce your taxable income while boosting your retirement savings by making voluntary contributions.

   
   

2. Prepay Deductible Expenses Before 30 JunePrepay eligible business expenses such as rent, insurance, or subscriptions to claim them in the current financial year.

   
   

3. Time Capital Gains Tax (CGT) Events StrategicallyPlan your asset sales to fall in a financial year where it’s most tax-effective based on your income bracket.

   
   

4. Keep Accurate Records for Work-Related DeductionsEnsure you keep receipts and logs for claims like home office expenses, vehicle costs, and travel expenses.

   
   

5. Don’t Miss Commonly Overlooked DeductionsMany taxpayers forget to claim:

   • Union fees

   • Work-related education and training costs

   • Interest on investment loans

   • Charitable donations

   • Professional subscriptions

💬 Tip: All deductions must be supported by written evidence (e.g., receipts) and kept for at least five years.

❓ Frequently Asked Questions (FAQ)

Q: When do the new tax rates take effect?

A: The new rates apply from 1 July 2024, covering the 2024–25 financial year.

Q: How much tax will I pay on an income of $60,000?

A: Under the new rates, you’ll pay approximately $8,688 in tax (excluding Medicare Levy). This represents an estimated $800 higher refund compared to the 2024 financial year.

Q: Do I need to change how I lodge my tax return?

A: No. You can continue lodging online via myGov or through a registered tax agent/accountant.

🧮 Need Help Estimating Your 2025 Refund?

The tax rate changes present both opportunities and risks. Whether you’re an employee, business owner, or investor, proactive tax planning can result in higher refunds or reduced liabilities.

✅ Estimate your 2025 refund → [Free Tax Calculator]

✅ File your tax return online with professional support → [Baron Accounting Online Tax Return]

📢 Final Thoughts

The 2025 Australian income tax reform marks one of the most significant changes in recent years. Whether you’re an employee, self-employed, or an investor, it’s critical to review your tax strategy, maximise deductions, and prepare early.

💬 Got questions about your tax return?

Whether you're an employee, sole trader, or investor, our registered accountants are ready to assist you online — wherever you are in Australia.

📞 Contact us:

• Phone: 1300 087 213

• Email: info@baronaccounting.com

• LINE: barontax

• WhatsApp: 0490 925 969