ATO Update: May 2025

Whether you're running a business or working remotely, these updates are worth knowing to keep your finances sharp and your compliance on point. 

Personal Tax Cuts Locked In 

 Big changes are coming to personal income tax: 

• From 1 July 2026, the 16% tax bracket will drop to 15% 

• Then down again to 14% from 1 July 2027 

These staged cuts aim to provide relief for working Australians and reduce bracket creep over time. 

$20K Instant Asset Write-Off Extended  

Great news for small businesses!  You can continue to immediately deduct assets under $20,000 until 30 June 2025. This applies to eligible new and second-hand business purchases; such as tools, office equipment or technology. 

New Work-From-Home Deduction Rate – 70c/hr  

If you’re working from home, the ATO has increased the rate to 70c per hour fixed-rate method from 1 July 2024

This updated rate covers: 

• Power and gas 

• Phone and internet 

• Stationery and consumables 

No more needing a separate home office, just track your hours and keep your receipts. Depreciation on items (like a laptop or desk) can still be claimed separately

Monthly GST for Some Small Businesses  

From 1 April 2025, the ATO is moving non-compliant businesses with poor lodgement history to monthly GST reporting to improve oversight. 

If you receive this notice, your BAS lodgement frequency will change (cash flow planning will become more important).

FBT Update: Plug-In Hybrid Cars  

From 1 April 2025, plug-in hybrid electric vehicles (PHEVs) will no longer be exempt from Fringe Benefits Tax; unless the commitment was made prior to that date. 

If you’re thinking of salary packaging a vehicle, speak to us first to ensure you understand the tax implications. 

Super Guarantee Rate Increasing  

The Super Guarantee (SG) rate will rise from 11.5% to 12% on 1 July 2025. 

Now’s a good time to review your payroll systems and budgeting to stay compliant. 

PAYG Withholding Cycle Updates  

The ATO is adjusting thresholds that determine how often businesses must lodge and pay PAYG Withholding. 

If your withholding amounts have increased recently, you may be moved from quarterly to monthly cycles from 1 July 2025. We'll help you stay on top of this if it applies to your business. 

At Apex Tax Advisory, we help individuals and small business owners stay compliant and take advantage of every opportunity to save on tax. Whether you’re claiming WFH deductions, upgrading business equipment or reviewing your payroll systems we’re here to support you every step of the way. Call or email us today to get started.