New changes in labour legislation could put extra money in your pocket 

On July 1, 2024, everyone working in Australia, local and international, is getting a “pay rise.” This is thanks to the Stage 3 tax cuts, which changes the individual income tax rate and thresholds delivered by the Australian government.   

Stage 3 tax cuts explained

The stage 3 tax cuts are part of a broader tax reform package that was initially announced in 2018. The goal of these reforms is to streamline the income tax brackets, making the tax system more straightforward and equitable.  

How does the tax cuts affect working holiday visa holders? 

The Stage 3 tax cuts also bring changes for international working holiday visa holders, who play a vital role in the Australian economy, particularly in the agriculture and tourism sectors. 

With the existing 50% off tax benefit for international workers and the recent reduction in the tax rate, you will pay even less tax than before. For instance, with an annual salary of $45,000 in the last financial year (July 1, 2023, to June 30, 2024), you were taxed at 19%. This financial year (July 1, 2024, to June 30, 2025), the tax rate has been reduced to 16%. 

This means that a salary of $45,000 under the new tax rate of 16% results in a tax amount of $7,200. With the 50% off tax benefit, you would only pay $3,600. Comparatively, at the previous 19% rate, you would have paid $4,275. Resulting in a potential saving of around $675 annually under the new tax rate. 

When do the Stage 3 tax cuts start?

According to the Australian government website, the individual income tax rates and thresholds will change from 1 July 2024. 

This means that from 1 July, most taxpayers will pay less tax each payday, allowing them to keep more of their earnings. The tax reduction will be reflected in each pay period – whether weekly, fortnightly, or monthly – depending on your company’s pay structure, rather than as a lump sum payment. 

You can use the tax cut calculator to estimate your annual tax cut.  

New individual tax rates and thresholds for 2024-2025 

The following is a tax cut table showing the changes in tax rates for 2023-24 to the new tax rates and thresholds for 2024-25:

How does the income tax rate and thresholds work?

With an income bracket of $0 – $18,200: 

• you are within the tax free zone. 

With an income bracket of $18,201 – $45,000:  

• you will pay 16c for each $1 over 18,200. 

With an income bracket of $45,001 – $135,000:  

• you will pay 16c for each $1 over 18,200 plus; 

• 30c for each $1 over $45,000. 

With an income bracket of $135,001 – $190,000:  

• you will pay 16c for each $1 over 18,200 plus; 

• 30c for each $1 over $45,000 plus; 

• 37c for each $1 over $135,000. 

Over $190,000: Remaining the same tax rate of 45%. 

• you will pay 16c for each $1 over 18,200 plus; 

• 30c for each $1 over $45,000 plus; 

• 37c for each $1 over $135,000 plus; 

• 45c for each $1 over $190,000. 

How to get a job in Melbourne and greater Victoria? 

By offering a clearer and potentially more favourable tax regime, the Australian government hopes to attract more working holiday visa holders to fill essential roles in seasonal work and other casual employment opportunities. If you’re looking for a casual or permanent role in the construction industry, you can see our range of job listings here. Or reach out to our recruitment specialist by simply giving us a call on 03 9354 0466 or email – we always have work available in Melbourne and greater Victoria. 

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