Newsletter
Federal Budget Newsletter
PERSONAL TAXATION
Personal tax rates: budget deficit levy not to be extended
The 2015–2016 Budget did not make any changes to the current personal tax rates, although in the lead-up to the Budget, the Treasurer indicated that the 2% budget deficit levy (tax) on incomes over $180,000 would not be extended beyond its initial three years.
The levy was announced in last year's Budget and applies for three years from 1 July 2014. It is due to cease at the end of the 2016–2017 financial year.
Work-related car expenses simplified
The Budget confirmed that the 12% of original value and one-third of actual expenses incurred methods would be discontinued. That means only the cents per km and logbook methods remain. The Government will set 66 cents per kilometre as the rate for using the cents per km method, irrespective of a car's engine size. The changes will apply from the 2015–2016 income year.
Medicare levy low-income thresholds for 2014–2015
From the 2014–2015 income year, the Medicare levy low-income threshold for singles will be increased to $20,896 (up from $20,542 for 2013–2014). For couples with no children, the threshold will be increased to $35,261 (up from $34,367 for 2013–2014). The additional amount of threshold for each dependent child or student will be increased to $3,238 (up from $3,156).
For single seniors and pensioners, the Medicare levy low-income threshold will be increased to $33,044 (up from $32,279). This threshold applies to those entitled to the seniors and pensioners tax offset (SAPTO). The measure will apply from 1 July 2014.
Temporary working holiday makers – tax residency rules to change
The Government will change the tax residency rules to treat most people who are temporarily in Australia for a working holiday as non-residents for tax purposes, regardless of how long they are here. This means they will be taxed at 32.5% from their first dollar of income.
This measure will apply from 1 July 2016.