There are a range of big money changes coming into effect on July 1, including tax cuts, super changes and wage increases. · Source: Yahoo Finance/Getty
Tax cuts, wage increases and superannuation boosts are coming for Aussies in a matter of weeks. The new financial year is just around the corner, and it’ll bring a ton of financial changes.
More than 14 million Aussies will receive a tax cut of up to $268 from July 1, nearly 2.8 million people will see an increase to their pay rates, and some Centrelink payments will get a small boost. There’s also major changes to superannuation, with both payday super and the new tax on balances over $3 million kicking in.
Here’s a look at what you can expect come July 1.
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Tax cuts
Every Aussie taxpayer will receive a tax cut when the lowest marginal tax rate of 16 per cent is reduced to 15 per cent. This applies to taxable income between $18,201 and $45,000.
On July 1, 2027, the 15 per cent tax rate will be reduced further to 14 per cent.
More than 14 million Aussies will benefit from a tax cut of up to $268 this year, according to the government. The tax cut will then increase to up to $536 from next year.
$1,000 instant tax deduction
The $1,000 instant tax deduction will also come into effect in the new financial year. This allows Aussies to reduce their taxable income by $1,000 without providing receipts when they lodge next year’s 2026-27 tax return.
More than 6 million workers, or 42 per cent of taxpayers, are expected to be able to get an average tax saving of $205 for the coming financial year.
If you want to claim more than $1,000 in work-related deductions, you can still do it the usual way. Importantly, this is starting next financial year, so you can’t claim it in this year’s tax return.
Payday super
Employers will be required to pay their employees’ superannuation at the same time as wages. That means the compulsory 12 per cent payment will need to be made weekly, fortnightly or monthly, instead of quarterly.
The change is designed to crack down on unpaid super, with the ATO estimating $6.25 million went unpaid to workers in the most recent financial year.
Workers will also benefit from more frequent and earlier super contributions, with a 25-year-old estimated to get an extra $6,000 in their retirement nest egg from the change.
New tax for high super balances
Individuals with superannuation balances over $3 million will be taxed at 30 per cent on earnings over that threshold, up from 15 per cent. Earnings on balances over $10 million will be taxed at 40 per cent.
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The change will impact around 80,000 to 90,000 Aussies, or about one in 200 super fund holders.
The thresholds will be indexed in line with CPI and the tax will not apply to unrealised gains, which was a controversial aspect of the original plan.
Other super changes include an increase to the concessional contributions cap from $30,000 to $32,500, and the non-concessional contributions cap from $2 million to $2.1 million.
Minimum wage increase
The Fair Work Commission recently announced a 4.75 per cent increase to minimum wages.
The new national minimum wage will be $26.44 per hour, up from $24.95 an hour. This will work out to $1,004.90 per week, up from $948, based on a 38-hour week.
Nearly 2.8 million people are paid at a minimum wage rate under a modern award and will see this boost, while around 100,000 of the lowest-paid employees get the minimum wage.
Centrelink thresholds change
Some Centrelink rates, thresholds and limits will increase as part of regular indexation.
For families receiving the Family Tax Benefit Part A, the maximum rate of pay for children under 13 will increase to $235.48 a fortnight, an increase of roughly $8. For those with children over 13, the rate will increase to $306.46.
The maximum rate of Family Tax Benefits Part B will increase to $200.34 per fortnight for those with the youngest child under 5, an increase of $7. For those with the youngest aged five and over, the maximum rate will increase to $139.86.
Income and asset thresholds will also increase for the Age Pension and Disability Support Pension.
Parental Leave Pay goes up
The government’s Parental Leave Pay will increase from 120 days to 130 days.
Based on a five-day work week, that means parents can access 26 weeks of pay if their child is born or adopted from July 1.
Partnered parents will have 20 days reserved for their partner, up from the current 15 days. Single parents can use all the parental leave pay days.
Parental leave pay is based on the national minimum wage.
Medicare Levy Surcharge thresholds increase
The Medicare Levy Surcharge thresholds will increase to $105,000 for singles, up from $101,000, and $210,000 for families, up from $202,000.
The Medicare Levy Surcharge is an extra tax you have to pay if you earn over a certain income and don’t have private hospital cover. It is in addition to the 2 per cent Medicare Levy.
Scam text crackdown
It’ll be harder to get scammed via text message due to new anti-scam rules.
Text messages sent using an unregistered branded Sender ID will now have the word ‘Unverified’ instead of the brand name
They will be grouped with messages from other unregistered senders, along with other potential scam messages.
Aussies lost nearly $18 million to text message scams last year, so the changes are designed to crack down on scammers relying on familiar names, like Australia Post or the ATO, to make fake messages look real.
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