Is your payroll system ready for the new tax bracket changes?

In the Budget, the government announced changes to the income tax thresholds for personal income that take effect from 31 July 2024. This means if you employ staff, you’ll need to be aware of these changes. The income tax thresholds will be adjusted as follows:

Current threshold	New threshold (31 July 2024)	Tax rate
$0-$14,000	$0-$15,600	10.50%
$14,001-$48,000	$15,601-$53,500	17.50%
$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%

What employers need to do

Whether you have a payroll system or file manually, you need to make some changes to income tax calculations for your employees.

Payroll Systems

If you use a cloud-based payroll system, these systems should update to the new thresholds automatically. If you haven’t already heard from you payroll provider we’d recommend confirming with them if this change will happen automatically.

If you use a payroll system that isn’t cloud based, we recommend getting in touch with your provider, if you haven’t already heard from them already.

If you file your payroll manually, you’ll need to make sure you’re using the new tax tables in your calculations for all employees from 31 July.

Other changes

From 1 April 2025, both the Fringe Benefit Tax (FBT) and Employer Superannuation Contribution Tax (ESCT) thresholds will change so keep an eye out for more information on these changes next year.