Stage 3 Tax Cuts Calculator
Estimate Your Tax Cut
2023-24 settings
Estimated annual tax liability: $0
Under new tax cuts
Estimated annual tax liability: $0
From 2024-25 onwards, based on your annual taxable income you will receive an annual tax cut of $0 compared to 2023-24 settings.
In 2025, Australians will see changes in their tax system thanks to the Stage 3 tax cuts. No need to stress as long as you earn between $45,000 and $135,000 a year. Get ready for tax cuts that increase your take-home pay!
From July 2024, the 19% tax rate will drop to 16%, and the 32.5% rate will fall to 30%. This change offers financial relief, especially for those with lower and middle incomes. Higher earners will also benefit, just to a lesser extent. To see how much you could save, use our Stage 3 Tax Cuts Calculator. Type in your annual income and get the amount you’ll save with the new stage 3 tax cut! You can also read our guide to understand these changes better.
See How Stage 3 Tax Cuts Benefit You and Calculate Your Tax
Use our Stage 3 Tax Cuts Calculator for a simple way to estimate your tax savings. We have also given a guide on the Australian tax system and Stage 3 Tax Cuts. Read that to understand exactly how these changes will affect you.
Use Our Stage 3 Tax Cuts Calculator
Write your annual income and our Stage 3 Tax Cuts Calculator will help you see how much tax you can save in the 2024-2025 financial year. The Stage 3 tax cuts will reduce the taxes you pay compared to the 2023-24 rates. Here’s what the calculator can tell you:
Limitations of the Calculator
Our calculator gives you a general idea of your tax savings, but there are some things to keep in mind:
How Australia’s Tax System Works with New Stage 3 Cuts
Australia uses a progressive tax system. This means the more you earn, the higher the percentage of tax you pay. Recently, major changes have been made to how much tax you’ll pay, especially with the new Stage 3 tax cuts. Here’s all you need to know to understand what’s happening:
History of Australia’s Tax System and Tax Cuts
A tax cut simply means you pay less tax. In 2019, the government introduced new tax plans with three stages to help balance the taxes people pay as their incomes rise
Stage One
This stage gave a temporary tax break of up to $1,080 for people earning between $30,000 and $126,000. This tax break ended in June 2022.
Stage Two
This stage adjusted the income range for the 32.5% tax rate. Here’s what it looked like:
| Taxable Income | Tax To Pay |
| 0 – $18,200 | 0 |
| $18,201 – $45,000 | 19% |
| $45,001 – $120,000 | 32.5% |
| $120,001 – $180,000 | 37% |
| $180,001 and over | 45% |
Initial Stage Three Tax Cuts
The plan for this stage was to remove the 37% tax rate and lower the 32.5% tax rate to 30%. It also planned to increase the threshold for the top 45% tax rate from $180,000 to $200,000. This meant people earning between $45,000 and $200,000 would all pay the same 30% tax rate. It was supposed to look like:
| Taxable Income | Tax To Pay |
| 0 – $18,200 | 0 |
| $18,201 – $45,000 | 19% |
| $45,001 to $200,000 | 30% |
| Above $200,000 | 45% |
So, What’s New With Stage 3 Tax Cuts in Australia
Instead of that “supposed” Stage 3 Cuts, Anthony Albanese reworked tax rates and thresholds so that “all working taxpayers can get a tax cut”.
Stage 3 tax cuts will lower income tax for many people in Australia. They will change how much tax you pay based on your income. If you earn within certain amounts, you will pay less tax.
Here are the changes:
Here’s what it looks like:
New 2024-25 Rates and Thresholds
| Taxable Income | Tax To Pay |
| 0 – $18,200 | 0 |
| $18,201 – $45,000 | 16% (Previously 19%, Change #1) |
| $45,001 – $135,000 (Previously $120,000, Change #2) | 30% |
| $135,001(Previously $120,000, Change #2) – $190,000 (Previously $180,000, Change #3) | 37% |
| $190,001 and over (Previously $180,000, Change #3) | 45% |
Note!
These tax cuts won’t affect the tax return for the 2023-24 financial year. They only start impacting your taxes from July 2024 onwards.
How Tax Rates Work Now
Here’s how the new tax rates will apply to your income:
- Up to $18,200: You don’t pay any tax.
- $18,201 to $45,000: You pay 16% tax on this part of your income.
- $45,001 to $135,000: You pay a 30% tax on this part of your income.
- $135,001 to $190,000: You pay 37% tax on this part of your income.
- Over $190,000: You pay a 45% tax on the amount above $190,000.
These changes mean that if you earn less than $150,000 a year, your tax cut will be bigger than before. If you earn more than $150,000, your tax cut will be smaller.
Overall Impact On Income Brackets
The new Stage 3 tax cuts in Australia will affect people differently based on how much they earn. Here’s a simple look at what these changes mean.
Who Benefits The Most
Low and middle-income earners benefit the most. If you earn between $45,000 and $135,000 a year, you will get the most benefit. You’ll receive an extra $804 a year, on top of what you already get. People who earn a lot of money will also get a tax cut, but it won’t be as big as before.
For Example
Previously, someone earning $45,000 wouldn’t see any tax savings–But now they will get a tax cut of 804$! However, someone earning $200,000 will only save $4,529 instead of the $9,075 originally expected.
Overall, the Stage 3 Tax Cut changes are designed to make sure lower-income earners also get benefits. With these new tax cuts, everyone who earns more than $45,000 will benefit, even if it’s just a small amount. Just use the Stage 3 Tax Cut calculator to see how much you can keep in your pocket with the new tax cuts.
