Changes to be alert to as we head into a new year...
#1: Income tax thresholds
Effective from 31 July 2024, personal income tax thresholds changed. Composite rates to account for this applied for the income year to 31 March 2025.
The following rates apply from 1 April 2025 for the income year to 31 March 2026:
- 10.5% applies up to $15,600 (previously $14,000)
- 17.5% applies from $15,601 to $53,500 (previously up to $48,000)
- 30% applies from $53,501 to $78,100 (previously up to $70,000)
Double check your payroll systems have reflected the composite rates applying from July and that they are set up for the new marginal tax rate thresholds applying from 1 April 2025.
#2: Fringe Benefit Tax (FBT)
With the changes to income tax thresholds, FBT rates also change, with effect from 1 April 2025. If you provide benefits to employees, review your FBT reporting processes and ensure you’re set up to account for the changes.
#3: Minimum Wage Increases
From 1 April 2025:
- The adult minimum wage goes up from $23.15 to $23.50 per hour.
- The starting-out and training minimum wage goes up from $18.52 to $18.80 per hour.
All rates are before tax and lawful deductions, e.g. PAYE tax, student loan repayment, child support.
#4: eInvoicing
The government has committed to ensuring all government agencies processing over 2,000 domestic invoices annually must use eInvoicing and pay 95% of these invoices within five business days by 1 January 2026. This will have a ripple effect across the business community and quickly become standard practice.
By exchanging invoices directly between accounting systems, eInvoicing:
- Streamlines payments for improved cash flow.
- Boosts accuracy by eliminating data entry errors.
- Saves time and money by reducing admin tasks.
- Eliminates delays and enhances security with invoices sent directly between trusted networks.
Visit the eInvoicing website to find out more and access easy step-by-step set up guides.
