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:
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$268 in 2026
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$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:
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Tax Avoidance Taskforce – multinationals and large corporations
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Shadow Economy Program – tackling cash economy and under-reporting
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Personal Income Tax Compliance – stronger review of deductions and reporting
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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:
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Fairer repayment system based on marginal tax rates
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Higher income threshold before repayments kick in
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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.
