Australia’s new financial year brings tax cuts, wage rise and workplace changes from July 1

Australians will see a range of tax, workplace and business changes take effect from July 1 as the new financial year begins, with reforms covering income tax, minimum wages, superannuation, paid parental leave and small business incentives, according multiple media reports.

The changes are expected to boost take-home pay for millions of workers, strengthen retirement savings, provide additional support for families and ease compliance for small businesses.

Tax relief

From July 1, the lowest personal income tax rate will fall from 16% to 15% for income between A$18,201 and A$45,000.

Workers earning A$45,000 or more will receive annual tax savings of up to A$268.

The Federal Government has also proposed a new "instant" A$1,000 work-related tax deduction, replacing the existing A$300 threshold for receipt-free claims. If approved by Parliament, the measure will apply from this financial year and is expected to leave around 6.2 million Australians better off.

However, employees claiming more than A$1,000 in work-related expenses are still expected to benefit more by retaining receipts and lodging detailed claims.

Higher wages

Around 2.8 million of Australia's lowest-paid workers will receive a 4.75% wage increase from July 1.

The national minimum wage will increase from A$24.95 to A$26.44 per hour, while the weekly minimum wage will rise from A$948 to A$1,004.90.

Around 100,000 entry-level and minimum wage employees will receive a larger 5.97% increase.

Despite the rise, Australia's lowest-paid workers will still have less purchasing power than they had five years ago due to the impact of inflation.

Super changes

Employers will now be required to pay employees superannuation at the same time as wages under the new payday super rules.

The reform is designed to reduce unpaid super and improve retirement savings by ensuring contributions are deposited more regularly throughout the year.

Parental support

Paid parental leave will increase by 10 days from July 1, taking the total entitlement to 26 weeks.

The weekly payment will also rise to A$1,004.70. Families will continue to be required to meet both income and work tests to qualify for the payment.

Business measures

Small businesses with an annual turnover below A$10 million will continue to benefit from the permanent extension of the instant asset write-off for eligible assets costing less than A$20,000.

The measure aims to encourage business investment while reducing administrative burdens for eligible businesses.

Market oversight

New supermarket pricing laws will also come into effect, making it harder for Australia's largest supermarket chains, Coles and Woolworths, to charge what the legislation describes as "excessive prices".

The reforms increase regulatory scrutiny of supermarket pricing practices and introduce penalties for breaches, although proving excessive pricing may remain challenging.

AML expansion

Anti-money laundering and counter-terrorism financing obligations are being expanded to cover more industries.

From July 1, real estate professionals, lawyers, accountants, conveyancers and several other businesses will be required to register with AUSTRAC, verify customer identities and report certain transactions as part of strengthened compliance requirements.

Still pending

Several tax measures announced in the Federal Budget will not take effect this financial year.

Proposed changes to negative gearing and the 50% capital gains tax discount remain before Parliament and are scheduled to commence from July 1, 2027.

A proposed minimum tax on discretionary trusts is not expected to begin until July 1, 2028.

Meanwhile, the Working Australians Tax Offset, worth A$250 annually, is also due to commence from July 2027.