Tax time is a good reminder that rates and thresholds can change from year to year. These changes can affect deductions, tax payable and planning opportunities before 30 June.
For Australian tax residents, the tax-free threshold remains $18,200 for the 2025/26 income year. The Medicare levy remains at 2%, although reduced rates or exemptions may apply for low-income earners, families and eligible seniors.
The Medicare Levy Surcharge may also apply where income exceeds the relevant threshold and appropriate private hospital cover was not held.
The fixed rate method for working from home remains at 70 cents per hour. This covers additional running costs such as electricity, internet, phone usage, stationery and computer consumables. Good records of hours worked from home are essential.
For work-related car expenses, the cents per kilometre rate is 88 cents per kilometre, up to a maximum of 5,000 business kilometres per car. Where business use is higher, the logbook method may provide a better result, provided proper records are kept.
Eligible small businesses with aggregated turnover of less than $10 million may be able to claim an immediate deduction for depreciating assets costing less than $20,000.
The car depreciation cost limit for 2025/26 is $69,674, which is relevant where a car is purchased and used for business or work-related purposes.
The concessional contributions cap is $30,000 for 2025/26, while the non-concessional contributions cap is $120,000. The super guarantee rate is 12%.
For HELP and other study loans, compulsory repayment thresholds begin once repayment income exceeds $67,000. Repayment income can include more than just taxable income, so salary packaging, reportable super contributions and investment losses may affect the calculation.
Small threshold changes can make a real difference at tax time. Keeping accurate records and checking the rules before claiming deductions or making contributions can help avoid surprises and ensure available opportunities are not missed.
The information contained on this website and in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. Taxation, legal and other matters referred to on this website and in this article are of a general nature only and are based on our interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
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