On 14 May 2024, Treasurer Jim Chalmers unveiled the much-awaited 2024-25 Federal Budget. This budget introduces various measures related to taxes, superannuation, and employment, all aimed at addressing the government’s top priority: supporting Australians through the cost-of-living crisis.
While the Payroll industry’s most significant announcement in the Budget did not come as a surprise, it remains noteworthy.
The politically charged Stage 3 personal income tax cuts, already legislated in February this year, will come into effect on July 1, 2024. These changes promise tax reductions for all employees, marking a significant shift in fiscal policy.
Here we summarise the key highlights that you need to know about the budget announcements as they relate to employers and their staff and the impact on payroll:
- Outlook -Due to inflation, higher interest rates and financial sector strains, the global economic outlook is slowing down
- Tax Cuts – Stage 3 changes will offer tax cuts to all income levels
- HECS / FEE-HELP – debts will now only increase based on the lower of CPI or Wage Price Index. This change, retroactive to 1st June 2023 and is ensure that these debts do not grow during periods where wages do not keep up with inflation
- Paid Parental Leave – The government will pay Super on Government Paid Parental Leave for parents of babies born or adopted on or after 1 July 2025
- Paid Practical Placements – $425m over 4 years set aside to establish a new Commonwealth Practical Placement Payment of $319.50 per week from 1 July 2025.
- Fairwork Ombudsman
- $27.5m over 4 years to target non-compliance by large corporate employers
- $20.5m over 4 years to support small business employers to comply with recent changes to workplace laws
- Labour Hire Regulation and Harmonisation – The Victorian Government is tasked to establish a project office and progress a national labour hire regulation model through harmonisation of state and territory laws.
- Fair Entitlements Guarantee Recovery Program – pursue unpaid superannuation entitlements owed by employers in liquidation or bankruptcy from 1 July 2024
- Digital IDs – an exciting area to watch as it progresses as it could mean a change to how employee bank accounts, Visa checks and Tax Declarations are managed in the coming years
- Anti-Money Laundering measures – this may catch Payroll Professionals with requirements to do Know Your Client (KYC) checks.
Complete the form below to access the Federal Budget 2024-25 Analysis webinar recording with ReadyTech: