The 2025 Federal Budget, handed down on 25 March, includes several tax and financial updates that may impact your personal finances or business planning. Here’s a summary of the key measures and how they could affect you.
Personal Income Tax Cuts from 2026
The Government will reduce the bottom marginal income tax rate for earnings between $18,200 and $45,000:
| Financial Year | Tax Rate |
|---|---|
| From 1 July 2026 | 15% (down from 16%) |
| From 1 July 2027 | 14% |
These changes will provide tax cuts of up to:
$268 in 2026
$536 in 2027
Combined with Stage 3 tax cuts already legislated, the average taxpayer could see savings of over $2,500 per year by 2027–28.
Adjusted Medicare Levy Low-Income Thresholds
The thresholds have increased to reduce the burden on low-income individuals and families:
| Category | New Threshold 2024–25 |
|---|---|
| Single | $27,222 |
| Couple (no children) | $45,907 |
| Per dependent child/student | $4,216 |
| Senior/Pensioner (SAPTO) Individual | $43,020 |
| SAPTO Family | $59,886 |
Small Business: Instant Asset Write-Off Extended
Originally due to reduce to $1,000 from 1 July 2025, the $20,000 instant asset write-off has been extended for another year.
Eligible small businesses can continue to claim an immediate deduction for assets under $20,000 in 2025–26 — helping support cash flow and investment.
ATO Compliance Funding Increases
ATO funding is increasing by nearly $1 billion to boost compliance. Key areas of focus include:
Tax Avoidance Taskforce – multinationals and large corporations
Shadow Economy Program – tackling cash economy and under-reporting
Personal Income Tax Compliance – stronger review of deductions and reporting
Super and Tax Payment Enforcement – especially for wealthy and large businesses
Takeaway: There will be greater scrutiny, especially for sole traders and small-to-medium businesses. Ensure your records and reporting are up to date.
No Changes to Superannuation Guarantee
As expected, the Super Guarantee will increase to 12% from 1 July 2025.
| Financial Year | SG Rate |
|---|---|
| 2024–25 | 11.5% |
| 2025–26 | 12.0% |
Energy Bill Relief: For Individuals and Businesses
An additional $150 rebate will be provided for eligible households and small businesses in the 2025–26 financial year, applied automatically to electricity bills in two $75 instalments.
Student Loan Debt Reduction
A one-off 20% reduction in student loan debts will be applied before indexation on 1 June 2025 — pending legislation. This is part of a broader $19 billion support package.
Other reforms:
Fairer repayment system based on marginal tax rates
Higher income threshold before repayments kick in
Indexation will continue to be capped at the lower of CPI or WPI (already backdated to 1 June 2023)
Need Help Navigating These Changes?
Whether you’re a small business, a sole trader, or an individual taxpayer — we’re here to help. Pisani Group can review your situation and make sure you’re:
✔ Claiming eligible deductions
✔ Taking advantage of asset write-offs
✔ Planning for tax rate changes
✔ Meeting ATO compliance requirements
Book an appointment with our team online or contact us directly to get personalised advice.
