2025 Tax Season — Key ATO Changes You Need to Know

The 2024–25 financial year has brought several significant changes from the ATO that affect individuals, employees, investors, and small business owners. Whether you're lodging your own return or working with an accountant, here's what you need to be across before you file.

1. Stage 3 Tax Cuts — Every Taxpayer Benefits

From 1 July 2024, the revised Stage 3 tax cuts came into effect. The changes restructured income tax brackets to deliver broader relief, particularly for low and middle-income earners:

• The 19% tax rate now applies to incomes from $18,201 to $45,000 (up from $37,000)
• The 32.5% rate now applies from $45,001 to $135,000
• The 37% rate applies from $135,001 to $190,000
• The 45% top rate applies above $190,000

Most Australian taxpayers will pay less tax for the 2024–25 year compared to prior years. Your PAYG withholding should already reflect these new rates — but your return will confirm the final position.

2. Work-From-Home Deductions

The ATO's revised fixed-rate method for working from home continues at 67 cents per hour for the 2024–25 year. This covers electricity, internet, phone, and stationery — but you must keep a record of actual hours worked from home (a diary or timesheet). You can claim separately for depreciation on office equipment and furniture.

The old 80 cents "shortcut" method is no longer available.

3. Cents-Per-Kilometre Rate Update

The ATO has increased the cents-per-kilometre rate for work-related car travel to 88 cents per kilometre for 2024–25 (up from 85 cents). This applies to the first 5,000 business kilometres claimed using the cents-per-km method — no logbook required, but you must be able to show how you worked out your kilometres.

4. Rental Property — Deduction Changes

Investment property owners should be aware of several ongoing compliance areas the ATO is scrutinising closely:

• Interest deductions — only the proportion of interest relating to income-producing use is deductible. If part of your loan was used for private purposes (e.g. redraw for personal spending), that portion cannot be claimed.
• Repairs vs capital improvements — immediate repairs are deductible, but improvements are depreciated over time. The ATO is closely reviewing incorrectly classified capital works.
• Short-term rental properties — properties listed on platforms like Airbnb that are not genuinely available for rent throughout the year may have deductions limited.

5. Superannuation Guarantee Increase

The Superannuation Guarantee rate increased to 11.5% from 1 July 2024. Employers must ensure their payroll systems reflect this updated rate. Employees should check their payslips to confirm super is being paid correctly.

6. Instant Asset Write-Off for Small Business

Small businesses (turnover under $10 million) can continue to immediately deduct the full cost of eligible assets costing less than $20,000 in the 2024–25 year. This applies per asset, not per business. Make sure you have valid tax invoices and the assets were used or installed ready for use before 30 June 2025.