What changed with the Stage 3 tax cuts?
The Stage 3 tax cuts, effective from 1 July 2024, restructured Australia's income tax brackets. The original Stage 3 plan (legislated in 2019) was revised in early 2024 to provide broader tax relief, including cuts for lower and middle incomes.
Old vs new tax brackets
| Bracket | 2023-24 (old) | 2024-25+ (new) |
|---|---|---|
| $0 – $18,200 | 0% | 0% |
| $18,201 – $45,000 | 19% | 16% |
| $45,001 – $120,000 | 32.5% | — |
| $45,001 – $135,000 | — | 30% |
| $135,001 – $190,000 | 37% | 37% |
| $190,001+ | 45% | 45% |
How much do the tax cuts save?
Every taxpayer earning above $18,200 received a tax cut. The savings are largest in dollar terms for those earning between $45,000 and $135,000, who benefit from both the reduced second bracket (19% → 16%) and the reduced third bracket (32.5% → 30%).
From 2026-27, the second bracket drops further from 16% to 15%, providing an additional saving of $268 per year for those earning above $45,000.
Compare your tax year-on-year
Use the Tax Comparison Calculator to see exactly how much the Stage 3 cuts save at your income level.