Upcoming tax and super changes from 1st July 2023

As seen in Woopi News May 2023

The end of the low and middle income tax offset.

Starting back in the 2018/19 financial year and extended throughout the pandemic, the low and middle income tax offset reduced tax payable by between $255 – $1080 for individuals earning up to $126,000, putting more money back into the hands of taxpayers. Taxpayers earning between $48,000 to $90,000 received the maximum amount of the tax offset, which was increased for the 2021/22 financial year to $1500. However, it will not be available in future years meaning, this coming tax season millions of Australians will see a noticeable difference in their tax assessment.

The low income tax offset, which has been around for many years will continue at a maximum rate of $700 for those earning less than $37,500, with taxpayers earning between $37,500 to $66,666 receiving up to $700.

The end of uncapped Temporary Full Expensing (previously called the Instant Asset Write Off).

The uncapped expensing of most assets for small business entities is set to end 30 June 2023. At this stage it will revert to the original legislation which was an instant deduction for business assets less than $1,000 and assets with a net value greater than $1,000 were added to a small business depreciation pool (with an accelerated depreciation rate). We are however awaiting the upcoming Federal budget on May 9, to see if there are any changes to this, as there have been in previous years.

Increase to the Super guaranteed percentage from 1st July.

The rate of super guarantee will increase to 11% of ordinary time earnings from 1st July 2023. Most Single Touch Payroll (STP) compliant employers should see this percentage update automatically for pay days on or after 1st July. There should be no need to update this manually unless specifically required by your chosen software provider.

 

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