2024 Federal Budget: What the Changes Mean for Employers and Employees?
Federal Treasurer Dr Jim Chalmers handed down the Australian Federal Budget 2024 on 14th May 2024.
The Albanese government hopes everyone will consider themselves winners with the 2024 budget by saving $300 on energy bills. The biggest cost-of-living relief in the budget comes from changes to stage-three tax cuts, a $359bn 10-year package announced by Labor in January and passed with opposition support in February.
Here is our wrap-up of the Australian Federal Budget for CFOs (Chief Financial Officer), HR (Human Resources), and Payroll leaders.
No Changes to Tax Cuts
The government reiterated that Stage 3 Tax Cuts will proceed as expected from 1 July 2024. These tax cuts will significantly impact both employers and employees. They will decrease employee income tax, potentially leading to higher take-home pay. Employers may need to reassess their payroll tax rates and make necessary adjustments to ensure compliance with the revised tax rates.
|
2022 – 2023 and 2023 - 2024 |
|
|
Taxable income |
Tax Payable |
|
$0 - $18,200 |
Tax-free |
|
$18,201 - $45,000 |
19 cents for every $1 over $18,200 |
|
$45,001 - $120,000 |
$5,092 plus 32.5 cents for every $1 over $45,000 |
|
$120,001 - $180,000 |
$29,467 plus 37 cents for every $1 over $120,000 |
|
$180,001 and over |
$51,667 plus 45 cents for every $1 over $180,000 |
|
2024 – 2025 |
|
|
Taxable income |
Tax Payable |
|
$0 - $18,200 |
Nil |
|
$18,201 - $45,000 |
19 cents for every $1 over $18,200 |
|
$45,001 - $120,000 |
$5,092 plus 32.5 cents for every $1 over $45,000 |
|
$200,001 and over |
$51,592 plus 45 cents for every $1 over $180,000 |
Paid Parental Leave and Superannuation Payments
Government-funded Paid Parental Leave will begin paying superannuation on 1 July 2025. This will be administered by the ATO, which means that the ATO will pay the superannuation contribution directly to the employees' funds. As a result, this will not affect employer obligations regarding government-paid parental leave. Employers will still be required to pay superannuation contributions abiding by the Superannuation Guarantee Charge. More information can be found on the ATO website.
Payday Super - Update
From 1 July 2026, employers must pay employees' SG contributions concurrently with their salaries and wages. This change contrasts with the current requirement to pay SG contributions quarterly.
Instead of waiting until quarter-end to investigate complaints, the ATO (Australian Taxation Office) can monitor complaints in real-time and respond quickly by aligning the super payment date with wages. To recover unpaid super, the ATO will prosecute deliberate and systematic underpayments of super as wage theft.
Payday Super is good for business as it allows employers to pay the Superannuation Guarantee together with an employee's wage, allowing workers to track their entitlements more easily. This enables businesses to streamline payroll management and reduce their liabilities.
The government has pledged $60 million over the next four years as part of the Productivity, Education, and Training Fund, with a portion designed to assist workplaces in adapting to the changes, including transitioning to payday superannuation. The funding will begin in the fiscal year 2024/25.
Student Debt Relief
The government announced in the lead-up to the budget that student loans would only be indexed to the consumer price index or wage price index, whichever is lower.
With the changes to the HECS and Help loan programs, around $3bn in student debts will be cut, reversing last year's horror 7.1% indexation hike, and saving average borrowers $1,200.
This reduction is welcomed by students struggling to pay off their loans. It will also reduce the burden on the government, which will have to pay less interest on its debt. Additionally, it will relieve the economy, as less student debt means more money to spend on goods and services.
Pay Changes for the Care Sector
Treasurer Jim Chalmers described workers in the aged care and early childhood sectors as the backbone of our society who "deserved" a pay increase in his 2024 Federal Budget speech.
Most of these workers are women, and Chalmers said the increases will close the gender pay gap. According to the most recent figures, there are over 216,000 early childhood workers in Australia.
"We will ensure those who look after our kids as they learn, and our parents as they age, have the secure, well-paid jobs they deserve," Chalmers said.
Health and Well-being
The government has allocated $361.0 million for the establishment of a nationwide early intervention digital mental health service to expand the number of free mental health services covered under Medicare over the next four years.
A new specialised disability employment program will support around 270,000 people with disabilities and provide $468.7 million towards getting the NDIS back on track. The program will provide employment support, such as training and skills development, to help people with disability find and keep a job. It will also help employers create more inclusive workplaces. Finally, it will help to reduce financial and social barriers that prevent people with disability from entering the workforce.
Future Skills and Education
A variety of initiatives are being introduced across the country to reduce persistent skills shortages, including:
- Apprentice incentive payment of $10,000 for apprenticeships in the clean energy sector.
- $1.1 billion to reform higher education.
- $88.8 million for 20,000 new training positions in construction.
- $55.6 million to support women's clean energy careers.
While it is great to see women getting into clean energy, there is a missed opportunity to highlight the need for more females in trades.
With the focus on tertiary education, the government will invest in urgent skills needed. Over $500 million will be allocated for training and skills in priority industries. A $100 million Outcomes Fund will also be established to support skills and employment strategies based on place.
$1.8 million was set aside to streamline skills assessments for around 1,900 migrants from comparable countries working in Australia's housing construction industry, reducing trade shortages and easing the housing crisis.
Equal Opportunity
As part of its commitment to gender equality, the government pledged $925.2 million to support victims of violence leaving abusive intimate relationships.
Government-funded paid parental leave affects 180,000 families annually, with $1.1 billion allocated for superannuation.
Digital ID
Digital ID will be delivered across government departments over the next four years with $288 million from the federal budget.
The ATO will receive $155.6 million over two years from 2024–25 to continue operating and fine-tuning myGovID, while Services Australia will receive $46 million over two years to support its role as Digital ID administrator.
Most Australians have at least one form of digital identification. myGovID is used with the ATO, Medicare and Centrelink, and NSW has a digital driver's licence.
What is Dgital ID? There was no universally acceptable form of digital identification for Australians, which makes it difficult to access services that require identification online. With the help of Digital ID, a digital identification system, Australians can access these services safely and securely. Digital ID helps solve the identification issue - but it is not mandatory for everyone to use. Learn more on how to set up your Digital ID.
Managing Cybersecurity Risks
A commitment of $67.5 million over four years to crack down on scams and cyber fraud.
The government plans to introduce mandatory industry codes under a Scams Code Framework. With $37.3 million allocated over the next four years to manage and enforce the codes, social media and search engines will be the primary focus. Businesses in various industries, including accounting practices, will be able to combat scams effectively using their forms and services.
HR, finance, and payroll have vast amounts of sensitive personal data, so this announcement is good news for protecting it. Read more about The Importance of Securing Your Payroll Data.
Small Business Win
The $20,000 instant asset write-off for small businesses was extended by $290 million, which was welcome news. A further $10.8 million was allocated to provide small-business owners with tailored, free, and confidential financial and mental well-being support.
Around a million small businesses will receive rebates of $325, while remote areas will receive $777.4 million to develop jobs, services, and economic opportunities.
Australian Federal Budget 2024 resources
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