Summary of Key Announcements in the 2025–26 Federal Budget (Australia)
- 7 days ago
- 2 min read
Hello, this is Baron Tax & Accounting. The Australian Government has just released the 2025–26 Federal Budget. Let's take a quick look at the key changes that could impact individuals and small businesses, especially regarding taxes, education, superannuation, and cost-of-living relief.
✅ Personal Income Tax Cuts - 2025-26 Federal budget
From 1 July 2026, the tax rate for income between $18,200 and $45,000 will be reduced from 16% to 15%.
From 1 July 2027, the same tax bracket will be reduced further to 14%.
Taxpayers earning over $45,000 may see annual tax savings of approximately $268 in 2026–27 and $536 in 2027–28.
Note: These changes may be subject to confirmation after the next federal election.
✅ Medicare Levy Threshold Increase
From 1 July 2024, the income threshold for the Medicare Levy exemption will be increased.
Some low-income earners will see a reduction in their Medicare Levy burden.
✅ Changes to HELP Student Loans
Before 1 June 2025, 20% of all existing HELP and student loan balances will be wiped.
From 2025–26, the repayment threshold will rise to $67,000 (up from $54,435).
These adjustments confirm prior announcements made in the 2024 budget.
⚠️ Instant Asset Write-Off (Still Unconfirmed)
The current $20,000 instant asset write-off threshold is expected to remain until the end of 2024–25.
However, legislation has not yet passed, and if no changes are made, the threshold may revert to $1,000 in 2025–26.
🧾 Superannuation Reforms
✅ Payday Superannuation - 2025–26 Federal Budget
From 1 July 2026, employers will be required to pay super contributions on each payday, instead of quarterly.
This change will allow real-time tracking of unpaid super and is expected to boost retirement savings by over $6,000 for an average 25-year-old.
⚠️ Extra Tax on Large Super Balances Maintained
The proposed 15% additional tax on super accounts over $3 million will remain.
This may apply even to unrealised gains, and legislation is pending.
If not passed before the next election, the proposal may be scrapped.
💡 Cost of Living Support
✅ Energy Bill Relief - 2025–26 Federal Budget
Extended until December 2025.
Eligible households will receive $150 in credits ($75 per quarter).
Small businesses may also receive the same benefit, depending on eligibility by state.
✅ Expansion of Bulk Billing Incentives
From 1 November 2025, bulk billing incentives will be expanded for all Medicare patients.
The government aims to ensure that over 90% of GP visits are bulk billed by 2030.
✅ Reduced PBS Medication Costs
From 1 January 2026, the maximum co-payment for PBS-listed medicines will drop from $31.60 to $25.00 for Medicare cardholders.
For concession card holders, the cost remains frozen at $7.70.
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