2022/23 Federal Budget Key Points


The Federal Government delivered its 2022/23 budget on Tuesday 29 March 2022. Following are some of the key announcements impacting individual taxpayers and businesses.


Individuals

Following are the key tax and cost of living measures impacting individual taxpayers:

  • The 2022-2023 personal tax rates and income thresholds for residents are unchanged from the 2021-2022 year

  • Resident personal tax rates are legislated to change again from 1 July 2024, with the replacement of two middle tax brackets (32.5% and 37%) with one widened 30% tax bracket between $45,000 and $200,000

  • A once-off $420 tax offset for cost of living to low and middle income earners between $48,000 and $90,000 phasing out up to $126,000 for the 2021-22 income tax year

  • The Medicare levy low-income threshold for an individual increased from $23,226 (2020-21) to $23,365 (2021-22)

  • Once-off $250 tax exempt cost of living payment provided to eligible pensioners, welfare recipients, veterans and concession card holders delivered in April 2022

  • COVID-19 PCR test and RAT costs to become tax deductible for testing taken to attend a place of work from 1 July 2021

  • The fuel excise will be halved for a period of six months from 30 March 2022 to 28 September 2022

  • The PBS Safety Net threshold to be reduced for general and concessional patients lowering out-of-pocket costs for medicines for 2.4 million people from 1 July 2022

Businesses Tax incentives to assist small businesses include:

  • New tax incentives in place to encourage small businesses who adopt digital technology and train and upskill employees

  • Small businesses with an annual turnover less than $50 million will have access to a new bonus 20% deduction for the cost of external training courses delivered to their employees by providers registered in Australia. A $1 spend will equate to a $1.20 deduction where costs are incurred 29 March 2022 to 30 June 2024

  • Small businesses with an annual turnover less than $50 million will have access to a new bonus 20% deduction for the cost of digital technology expenses and depreciating assets e.g. laptop computers, website. A $1 spend will equate to a $1.20 deduction where costs are incurred 29 March 2022 to 30 June 2023

  • Reduction in the company tax rate from 26% (2020-21 year) to 25% from 1 July 2021 (2021-22 year) which was previously legislated

  • More State Government COVID-19 business grants to be treated as non-assessable, non-exempt (NANE) income for tax purposes until 30 June 2022

  • Government investment to increase take up and completion rates for apprenticeships including $5,000 payments to new apprentices and up to $15,000 in wage subsidies for employers who take them on

  • Single Touch Payroll (STP) data to be shared with States and Territories. This will support payroll tax returns to be pre-filled with STP data, to reduce compliance costs for businesses

  • COVID-19 PCR test and RAT costs to become exempt from fringe benefits tax (FBT)

  • Additional funding for the Fair Work Commission to establish a dedicated unit to support small businesses, including unfair dismissal and general protections disputes

Superannuation

  • Superannuation pensions 50% reduction to minimum drawdowns for retirees extended to 30 June 2023

  • Superannuation guarantee rate rise remains unchanged – 10.5% from 1 July 2022, 11% from 1 July 2023

Other Legislative Changes Temporary Full Expensing Extension On 11 May 2021, as part of the 2021–22 federal Budget, the Australian Government announced that it will extend the temporary full expensing incentive for 12 months until 30 June 2023. This extension is now law. Please click here for further information.

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