Outlined below are key topics you need to be aware of for the remainder of the 2015 financial year.
Individual Tax Rates
While there was no change to the individual income tax rates for the 2014/15 year, the effective top marginal tax rate has increased from 46.5% to 49% with an increase to the Medicare levy and the introduction of the temporary budget repair levy. The individual income tax rates (excluding these levies) will remain as follows:
The Medicare levy has increased from 1.5% to 2% for the 2014/15 year to fund the National Disability Insurance Scheme. This levy is payable by most individuals regardless of whether they hold private hospital cover or not.
Temporary Budget Repair Levy
The temporary budget repair levy came into effect from the 1 July 2014. This mean individuals earning over $180,000 will pay an additional 2% tax on the amount of their taxable income that exceeds $180,000. For example- a person with a taxable income of $190,000, they will pay a levy of $200 representing 2% of $10,000 ($190,000 minus $180,000).
Private Health Care Rebate
The thresholds for the private health insurance rebate and Medicare levy surcharge changed as from 1 July 2014. The thresholds for the 2014/15 year are as follows:
Superannuation Contribution Caps
As from the 1 July 2014, the superannuation contribution caps have changed. This will allow you to get more money into superannuation. The new contribution caps for the 2014/2015 financial year are as follows:
Compulsory Superannuation for Employees
As part of the government’s ongoing plan to increase the compulsory superannuation rates for employees the superannuation guarantee rate has increased from 9.25% to 9.5% as from the 1 July 2014.
Changes to Rules for Deprecation on Assets
For small businesses with a turnover less than $2 million, in the 2012–13 income year, are able to write-off depreciating assets that costed less than $6,500 in that income year if they started to use the asset, or had it installed ready for use, for a taxable purpose. They could also depreciate most other assets in the general small business pool at a rate of 15% in the first year and 30% thereafter.
As from the 1 January 2014, the threshold has change and only assets costing less than $1,000 (that the entity starts to use or have installed ready for use, after 31 December 2013) will be eligible for immediate write-off. Assets that costed $1,000 or more are to be depreciated in the general small business pool.
Assets costing less than $6,500, between 1 July 2013 and 31 December 2013, will still be eligible to be immediately written-off for the small to medium enterprises.