Changes have been made to provide tax relief for individuals and families. These changes, announced on 30 May, were part of the annual Government Budget 2024.
Changes from 31 July include:
- increasing personal income tax thresholds
- extending the independent earner tax credit
- increasing in-work tax credit and the minimum family tax credit.
If you're paid salary or wages
You do not need to do anything — most people will see the extra pay in their payslips from 31 July.
If an employer did not make the threshold change in time for 31 July, they can still make it at a later date and their employees won’t miss out. Any extra pay will either be in a later pay or squared-up as part of the end of tax year process.
What the changes mean for you
| Threshold to 30 July 2024 | New threshold 31 July 2024 | Tax rate |
|---|---|---|
| $0-$14,000 | $0-$15,600 | 10.5% |
| $14,001-$48,000 | $15,601-$53,500 | 17.5% |
| $48,001-$70,000 | $53,501-$78,100 | 30% |
| $70,001-$180,000 | $78,101-$180,000 | 33% |
| $180,001 upwards | $180,001 upwards, no change | 39% |
For the 2025 income year (1 April to 31 March 2025), because the change is part way through the year, the annual tax rates and thresholds are composites.
| Taxable income | Tax rate |
|---|---|
| $0-$14,000 | 10.5% |
| $14,001-$15,600 | 12.82% |
| $15,601-$48,000 | 17.5% |
| $48,001-$53,500 | 21.64% |
| $53,501 - $70,000 | 30% |
| $70,001 - $78,100 | 30.99% |
| $78,101 - $180,000 | 33% |
| $180,001 upwards | 39% |
| Current threshold | New threshold 31 July 2024 | Your entitlement |
|---|---|---|
| $24,000-$44,000 | $24,000-$66,000 | $10 a week or $520 a year |
| $44,001-$48,000 | $66,001-$70,000 | The payment reduces by 13 cents for every dollar you earn |
Customers may not get the full credit this tax year if their income was between $48,000 and $70,000. This is because the threshold only increased part way through the year.
Changes to personal income tax thresholds may affect other types of tax you pay
Secondary tax codes
If you use a secondary tax code, you should check if your yearly PAYE income payments are in the new threshold. Now that the new rates apply, you may need to change your tax code by completing an IR330 form. Give this form to your secondary income payer.
Resident withholding tax (RWT)
If you have investment income, the RWT rate won't automatically update at your bank or where you have money invested. If after 31 July your rate is wrong, you'll need to let them know which RWT rate to change you to.
Provisional tax
If you pay provisional tax you and/or your tax agent can review your situation and talk about whether you need to estimate or re-estimate.
Tailored tax codes
If you use a tailored tax code, we recalculated it and sent you and your employer a new certificate in July. If you didn’t receive an updated certificate from us and you think you need one, you can re-apply for one by completing a tailored tax code application in myIR or an IR23BS form online.
Working for Families payments changed on 31 July 2024
Minimum family tax credit (MFTC)
The yearly after-tax income to get MFTC increased from $35,204, ($677 a week) to $35,316, ($679 a week).
In-work tax credit (IWTC)
The base rate for the IWTC increased from $3,770, ($72 a week) to $5070, ($97 a week).
The new rate will update automatically and create a new entitlement period. If you're eligible, you would have received a Notice of Entitlement in late June.
Paid parental leave (PPL)
The new tax thresholds have updated. You would have received a new Notice of Entitlement in late June.
Changes for employers
If you use payroll software, your provider should have given you an update with the new rates when they had it ready. We gave software providers the new payroll specifications in July.
If you file manually or don't use a software provider, make sure you use the new tax tables in your calculations.
You can also use our PAYE calculator.
Work out PAYE deductions from salary or wages
Which PAYE tax tables
Use the PAYE tax tables that apply on the day the PAYE income payment is made to your employees.
| Pay period ends | Employees paid on | PAYE tables to use |
|---|---|---|
| 31 July 2024 | 30 July 2024 | 1 April 2024 to 31 July 2024 |
| 31 July 2024 | 31 July 2024 | 31 July 2024 onwards |
| 1 August 2024 | 1 August 2024 | 31 July 2024 onwards |
PAYE extra pays
Until 1 April 2025, for extra pay calculations use the personal income tax thresholds 1 April 2024 to 30 July 2024. Using these rates means less chance of people getting a tax bill at the end of the tax year.
Fringe benefit tax
From 31 July 2024 where benefits are attributed to each employee, a change applies to how FBT is calculated. A new calculation field will be added between tax on remuneration and FBT payable — 'FBT on net income'. To get the tax, this new field takes the net income figure and applies the FBT rates table to it — in the same way that the tax on remuneration field is calculated.
The change only applies to final quarter calculations — 4 January to 31 March, or any quarter that an employer ceases providing fringe benefits.