What the Latest Federal Budget Means for You!

The 2025 Federal Budget has just been announced, and it brings a mix of cost-of-living relief, tax cuts, and support for both individuals and small businesses.

We’ve broken down the key points in plain English so you can quickly understand what’s changing and how it might affect you.

Personal Income Tax Cuts Coming in 2026 and 2027

Good news if you pay tax — the government is planning to lower personal income tax rates starting in July 2026, with a further drop in July 2027.

Anyone earning above $18,200 will benefit from the reduction in the marginal tax rate currently 16% applied to earnings between $18,200 and $45,000, reducing to:

15% in 2026, and
14% in 2027

This means a tax cut of:

Up to $268 in 2026, and
Up to $536 in 2027

When combined with existing Stage 3 tax cuts, the average Australian could save about $2,548 a year by 2027–2028—that’s roughly $50 a week back in your pocket. For someone earning around $79,000, the total tax cut will be $2,190 by 2027–2028.

These cuts are designed to ease the cost of living and help part-time and lower-income workers. The government also expects these changes to encourage more people to increase their working hours.

2. Student Debt Relief for More Than 3 Million Australians

If you’ve got a HELP or student loan, here’s what you need to know:

The government plans to reduce HELP debts by 20% before indexation is applied on 1 June 2025. This could wipe around $16 billion in debt for over 3 million people.
From 1 July 2025, the new system is proposed, subject to parliamentary approval, that aims to:

-Raise the repayment income threshold, so you can earn more before you start repaying.

-Switches to a fairer repayment structure that increases gradually with income.

Also, a change already in place (backdated to June 2023) has capped indexation to whichever is lower — the Consumer Price Index (CPI) or Wage Price Index (WPI) — and has already reduced debts by $3 billion.

you’ve got a HELP or student loan, here’s what you need to know:

3. Energy Bill Rebate Extended — Small Businesses Included

The energy rebate is sticking around until the end of 2025 — and now includes small businesses too.

Here’s what you’ll get:

Another $150 rebate in total, split into two $75 quarterly payments, starting 1 July 2025.
This applies automatically to eligible households and about one million small businesses — no need to apply.

Treasury expects this will:

Cut the average power bill by about 7.5%, and
Help reduce overall inflation slightly in 2025.

4. Instant Asset Write-Off Extended — Still Being Finalised

Small businesses may soon be able to immediately write off new asset purchases under $20,000 again — but the rules haven’t officially passed yet.

If approved, this will apply to:

Assets bought and ready to use between 1 July 2024 and 30 June 2025.
Multiple assets under $20,000 each — there’s no limit on how many.

Larger purchases (over $20,000) can still be claimed gradually using the simplified depreciation rules. If your depreciation pool ends up under $20,000 at the end of the year, you can write the whole amount off too.

This rule is for businesses with a turnover of less than $10 million.

5. ATO Getting More Power to Crack Down on Tax Dodging

The ATO is getting nearly $1 billion over four years to boost its tax compliance programs — which means more focus on catching and preventing tax mistakes or fraud.

The funding will be used to:

Expand audits on big companies and multinationals.
Crack down on the “cash economy” — such as under-the-table payments or not reporting income.
Target individuals who might be incorrectly claiming deductions or not reporting income.

if you’d like to chat about how these changes apply to your situation, feel free to give us a call on 03 5571 0111 — or head to the Budget 2025-26 website for more information.

< Older Post

Newer Post >

Start Your Year-End Payroll, Tax And Employee Leave Planning Now

By Cogger Gurry • November 13, 2025

Start Your Year-End Payroll, Tax And Employee Leave Planning Now The end-of-year holiday period can be make or break for your business. Whether you’re gearing up for a rush or planning a shutdown, the key is early planning for payroll, tax and super, alongside careful compliance with workplace laws. Start by checking whether any year-end paydays will fall on public holidays or during your closure. If so, you’ll need to bring the pay run forward so staff are paid before bank cut offs, and tell employees about any temporary date changes in writing. While the ATO generally allows lodgement and payment on the next business day when a due date falls on a weekend or public holiday, that doesn’t extend to paying wages late. Report each pay run through Single Touch Payroll (STP) on or before payday, including any brought forward payments you’re processing before year-end closure. Keep your PAYG withholding and BAS lodgements on track. If you’ll have difficulty meeting due dates, contact your tax adviser and the ATO early to discuss options. Don’t overlook super guarantee (SG) contributions on wages and paid leave taken over the break; annual leave and public holiday pay are part of ordinary time earnings for SG purposes. October to December quarter super must be received by employees’ funds by 28 January, so pay early to allow for bank processing times and so you don’t trigger the SG charge, interest, penalties and loss of deductibility. If you provide year-end bonuses or staff gifts, process bonuses through payroll and withhold tax, and consider whether FBT applies to functions or presents. The minor benefits exemption may cover low cost, infrequent items, but good records are essential. Remember that full-time and part-time employees who would normally work on a public holiday are entitled to their base rate for ordinary hours if they don’t work. You can ask employees to work public holidays, but requests must be reasonable and employees can refuse on reasonable grounds. If they do work, apply the correct penalty rates or time off in lieu under their award or agreement. Where a public holiday happens during an employee’s annual leave, it counts as a public holiday, not a leave day. For holiday shutdowns, you can only direct employees to take annual leave if an applicable award or registered agreement allows it, usually with advance written notice. Where staff don’t have enough leave, many awards allow leave in advance or unpaid leave by agreement; make sure to document any agreement in writing. Check whether leave loading applies to annual leave taken over this period, and ensure your payroll system calculates it correctly.

PayDay Super

By Cogger Gurry • November 13, 2025

PAYDAY SUPER - Next step for payday super: legislation introduced to Parliament The government’s payday super reforms have taken another step towards implementation with the introduction of legislation to Parliament. Requiring employers to pay employee super contributions on payday, the reforms are designed to ensure that employees benefit from more frequent and earlier super contributions that grow and compound over their working life and reduce instances of unpaid super. Contribution timeframes are now measured in “business days” rather than “calendar days”, and employers will have 7 business days to make contributions. The legislation still needs to pass through both the House of Representatives and the Senate before it becomes law, but you shouldn’t wait to start planning. Recognising that employers need time to deploy, test and embed changes in their payroll systems and business processes, the ATO has released a new draft Practical Compliance Guideline that outlines its proposed compliance approach for the first year of payday super (starting 1 July 2026). It plans to use a risk-based framework where employers will be categorised as at low risk, medium risk or high risk of not meeting their payday super obligations. What’s next? Start preparing now. Review your payroll systems and processes to ensure they’re ready for payday super by 1 July 2026; consider whether more frequent super payments could have cash flow implications for your business that you need to act on; and look for alternatives if you use the SBSCH, as it will be closed from 1 July 2026. Planning ahead will help you be compliant with the law and make a smooth transition. Keep an eye on developments as the legislation progresses through Parliament and as the ATO finalises its compliance guideline. Changes could still be made before the reforms take effect.

Medicare Levy

By Cogger Gurry • November 13, 2025

Medicare Levy What’s the difference between the Medicare levy and the Medicare levy surcharge? Many people getting their tax notice of assessment wonder why they see amounts for the Medicare levy and Medicare levy surcharge. Here’s how it works. Medicare levy The Medicare levy is a compulsory charge that helps fund Australia’s public healthcare system. Almost all Australians pay this levy, which is 2% of your taxable income. The levy is generally withheld from your pay by your employer throughout the year, so you may not notice it until tax time. It’s important to note that having private health insurance doesn’t exempt you from paying the Medicare levy; it only affects your liability for the Medicare levy surcharge. In certain limited cases, such as if you’re a low-income earner, a foreign resident or have a medical exemption, you may qualify for a reduced rate or full exemption. Medicare levy surcharge The Medicare levy surcharge (MLS) is an additional charge designed to encourage higher-income earners to take out private hospital insurance, reducing the strain on the public healthcare system. The MLS isn’t automatically withheld from your income, but is calculated when you lodge your tax return. You may be liable for the MLS if your income exceeds the MLS threshold and you, your spouse and your dependent children don’t all have an appropriate level of private patient hospital cover for the entire income year. The surcharge rates vary based on your income tier, beginning at 1% for singles with 2025–2026 income over $101,000 and families with income over $202,000. Your income for MLS purposes includes several components beyond your taxable income, like reportable fringe benefits, total net investment losses and reportable super contributions. If you have a spouse, their income's also considered. Private health insurance To avoid the MLS when your income's over the threshold, you need an appropriate level of private patient hospital cover. Singles need a policy with an excess of $750 or less, and couples or families need a policy with an excess of $1,500 or less. Your policy must cover you, your spouse and all dependants for the full income year to avoid the surcharge. Keep in mind that extras-only cover (such as for dental or optical) and travel insurance don’t qualify as private patient hospital cover for MLS purposes. Please note that if you didn’t have private hospital cover from the year you turn 31 you will be liable to pay the lifetime health cover loading to your health insurer.