Australia Tax Return 2025: Complete Guide for Individuals and Small Businesses
11
Apr
Australia Tax Return 2025: Complete Guide for Individuals and Small Businesses
Whether you’re lodging your first individual tax return or managing a small business for the 2024–25 financial year, this complete guide covers everything you need — from key deadlines and deductions to ATO myTax lodgment and small business tax obligations.
What Is the 2025 Australian Tax Return?
The Australian tax return for the 2024–25 financial year (FY2025) covers income earned between 1 July 2024 and 30 June 2025. All Australian residents who earned taxable income above the tax-free threshold of $18,200 are generally required to lodge a return with the Australian Taxation Office (ATO).
Even if you earned below this threshold, you may still need to lodge if you had tax withheld from wages, received government payments, or ran a business. Lodging ensures you receive any refund you’re entitled to and stay compliant with ATO obligations.
The ATO processes millions of returns each year through its digital myTax platform, integrated with myGov. For most Australians with straightforward income and deductions, lodging takes less than 30 minutes online — and it’s completely free.
Key Point: The 2024–25 financial year ends on 30 June 2025. If you’re lodging yourself via myTax, the standard deadline is 31 October 2025. Tax agents registered with the ATO may have extended deadlines up to May 2026.
Key Tax Dates and Deadlines for 2024–25
Missing a lodgment deadline can result in automatic penalties. Mark these important dates for the FY2025 tax year:
1 July 2025
Tax return lodgment opens
ATO begins accepting FY2025 returns via myTax
Late August 2025
Pre-fill data available
Best time to start lodging once employer data is loaded
31 October 2025
Self-lodgment deadline
For individuals lodging directly via myTax
28 February 2026
Tax agent deadline
If registered with a tax agent before 31 October
21 October 2025
Q1 BAS due
For quarterly GST reporters (July–September)
28 February 2026
PAYG withholding summary
Annual PAYG withholding reconciliation for employers
Penalty Alert: Failing to lodge on time may incur a Failure to Lodge (FTL) penalty of $330 per 28-day period, up to a maximum of $1,650 for individuals. Small businesses face higher penalties based on entity size. Lodge early to avoid unnecessary costs.
2025 Individual Income Tax Rates
The following tax rates apply to Australian residents for the 2024–25 income year. These reflect the revised Stage 3 tax cuts that took effect from 1 July 2024:
| Taxable Income | Tax on This Income | Marginal Rate |
|---|---|---|
| $0 – $18,200 | Nil | 0% |
| $18,201 – $45,000 | 19c for each $1 over $18,200 | 19% |
| $45,001 – $135,000 | $5,092 + 32.5c for each $1 over $45,000 | 32.5% |
| $135,001 – $190,000 | $31,342 + 37c for each $1 over $135,000 | 37% |
| $190,001 and over | $51,592 + 45c for each $1 over $190,000 | 45% |
Note: The Medicare Levy of 2% applies on top of these rates for most taxpayers. Low-income earners may be eligible for a Medicare Levy reduction or exemption if their income falls below the relevant thresholds.
Stage 3 Tax Cuts: What Changed in FY2025?
The Australian Government’s revised Stage 3 tax cuts, which came into force on 1 July 2024, significantly reshaped income tax brackets. These changes deliver the largest benefits to low-to-middle income earners — a shift from the original Stage 3 design.
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The 19% tax bracket expanded from $37,000 up to $45,000, directly benefiting low-income earners.
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The 32.5% rate now applies all the way up to $135,000 (previously $120,000), absorbing what was the 37% bracket for many.
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The Low and Middle Income Tax Offset (LMITO) was not extended and ended after FY2023 — there is no LMITO for FY2025.
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The Low Income Tax Offset (LITO) remains, worth up to $700 for those earning under $37,500, phasing out at higher incomes.
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The Senior Australians and Pensioners Tax Offset (SAPTO) continues for eligible retirees, potentially reducing tax to zero for incomes below certain thresholds.
Who Benefits Most? Taxpayers earning between $45,000 and $135,000 see the largest proportional tax savings under the revised Stage 3 cuts, with many saving between $800 and $2,600 compared to pre-reform rates from FY2023.
How to Lodge Your Tax Return via myTax
Most Australians lodge their tax return online using the ATO’s myTax platform, accessible free-of-charge through myGov. Here’s a step-by-step walkthrough:
01
Link ATO to myGov
Log into your myGov account at my.gov.au and link the ATO service if you haven’t already. You’ll need your Tax File Number (TFN) and identity verification documents such as a passport or Medicare card.
02
Wait for pre-fill data (late August is ideal)
From mid-August 2025, myTax will automatically pre-fill data from your employer, bank, health funds, and government agencies. Waiting until late August ensures all employer income statements, dividend records, and bank interest data are loaded before you lodge.
03
Review and complete your return
Carefully review the pre-filled information. Add any additional income sources — freelance work, rental income, dividends, foreign income — and claim all eligible deductions. Every claim over $300 requires written evidence such as receipts or invoices.
04
Submit and track your refund
Once submitted, most returns are processed within 2 weeks. You can track your return status through myGov. Refunds are deposited directly to your nominated bank account via EFT. If you have a tax debt, you’ll receive a notice of assessment with payment options.
Pro Tip: Even if you don’t expect a refund, lodging on time keeps your tax record clean and avoids FTL penalties. The ATO also uses lodgment history when assessing applications for loans, government benefits, and business registrations.
Top Tax Deductions for Individuals in 2025
Maximising legitimate deductions is one of the most effective ways to reduce your taxable income. The three golden rules for claiming deductions are: (1) you spent the money yourself, (2) it relates directly to earning your income, and (3) you have records to prove it.
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Work-related expenses: Tools, uniforms, protective clothing, union fees, and professional memberships directly related to your current role. Generic clothing (even if worn to work) is not deductible.
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Vehicle and travel: Work-related car expenses using either the logbook method or cents-per-km method. The 2024–25 ATO rate is 88 cents per kilometre for up to 5,000 km.
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Home office expenses: Either the fixed-rate method (70 cents per hour) or the actual cost method for those with a dedicated home office space used exclusively for work.
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Education and self-education: Courses, textbooks, and training directly related to your current employment. Note: study to qualify for a new career is not deductible.
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Investment-related expenses: Interest on investment loans, financial advice fees for managing existing investments, and portfolio management costs.
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Charitable donations: Cash donations to registered Deductible Gift Recipients (DGRs) of $2 or more are fully deductible. Check DGR status at the ATO’s ABN Lookup.
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Income protection insurance: Premiums for income protection insurance held outside superannuation are generally deductible.
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Tax agent and accounting fees: Fees paid to a registered tax agent for preparing your prior-year return are deductible in the year they are paid.
ATO Focus Areas for FY2025: The ATO has flagged work-related deductions, rental property claims, and cryptocurrency transactions as key compliance focus areas. Ensure every claim over $300 is supported by written receipts, and claims under $300 can still be audited if the ATO considers them unusual. The “three-receipt rule” is a myth — keep everything.
Small Business Tax: Rates, Thresholds & Deductions
For small business owners operating as a company, trust, partnership, or sole trader, the 2024–25 year brings several critical obligations and opportunities.
Company tax rates for 2024–25
| Business Type | Annual Turnover Threshold | Tax Rate |
|---|---|---|
| Base rate entity (small business company) | Under $50 million | 25% |
| General company rate | $50 million and over | 30% |
| Sole trader income | Any | Individual marginal rates |
| Partnership (individual partners) | Any | Individual marginal rates |
Instant Asset Write-Off (IAWO) 2024–25
For FY2025, eligible small businesses with an aggregated annual turnover of less than $10 million can immediately deduct the full cost of eligible depreciating assets costing less than $20,000 per asset. This threshold applies to assets first used or installed ready for use between 1 July 2024 and 30 June 2025.
IAWO Note: The $20,000 threshold applies per asset — multiple assets under $20,000 can be written off in the same year. Assets costing $20,000 or more enter the general small business depreciation pool at 15% in the first year and 30% in subsequent years.
Superannuation guarantee obligations
The Superannuation Guarantee (SG) rate increased to 11.5% from 1 July 2024. Employers must contribute this percentage of eligible employees’ ordinary time earnings to their nominated superannuation fund by the quarterly SG due dates. The rate will increase further to 12% from 1 July 2025.
Key deductions for small businesses
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Staff wages, superannuation contributions, and payroll tax (state-based)
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Rent and occupancy costs for business premises
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Motor vehicle expenses using the logbook method (percentage of actual costs)
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Marketing, advertising, website hosting, and domain registration costs
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Professional services: accountant, bookkeeper, legal, and business advisor fees
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Equipment, software subscriptions (SaaS), and cloud service fees
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Business-related travel, accommodation, and entertainment (50% limit on meals)
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Bad debts formally written off in the income year
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Business insurance premiums (public liability, professional indemnity, etc.)
Work From Home Deductions in 2025
Remote and hybrid work remains widespread in Australia, and the ATO has maintained clear, updated rules for claiming home office expenses in FY2025. There are two approved methods for calculating your deduction.
Fixed-rate method (revised — 70 cents per hour)
Claim 70 cents per work-from-home hour to cover electricity and gas usage, internet expenses, stationery, and computer consumables. You must keep a record of actual hours worked from home — a timesheet, diary, roster, or calendar log is acceptable. Under this method, you can still separately claim phone and internet costs if your actual usage exceeds what the 70-cent rate covers for those items.
Actual cost method
Claim the actual work-related proportion of every home expense: electricity, gas, internet, phone, decline in value of equipment, repairs, and cleaning costs for a dedicated home workspace. This requires more detailed records but is typically more beneficial for those with a room used exclusively and regularly for work.
Record keeping tip: The ATO requires you to keep a representative 4-week diary at least once per income year to substantiate the work-related portion of shared home expenses. Don’t wait until June — start tracking now for the most accurate picture.
Capital Gains Tax (CGT) Overview
If you sold an asset — property, shares, managed funds, cryptocurrency, or business assets — during FY2025, you may have a Capital Gains Tax (CGT) liability. CGT is not a separate tax in Australia; capital gains are included in your assessable income and taxed at your marginal rate.
50% CGT discount for assets held 12+ months
If you are an Australian resident individual or trust and held the asset for more than 12 months before the sale event, you are eligible for the 50% CGT discount. This means only half your net capital gain is included in taxable income — potentially cutting your CGT liability in half.
Main residence exemption
Your main home is generally fully exempt from CGT, provided you lived in it for the entire period you owned it and didn’t use it to produce income (e.g., renting out rooms or using it as a home office can affect the exemption proportionally).
Cryptocurrency and CGT in 2025
The ATO treats cryptocurrency as a capital asset, not currency. Selling, swapping one crypto for another, gifting crypto, or using it to purchase goods or services are all CGT events that must be reported. The ATO uses data-matching with Australian crypto exchanges to identify unreported gains — this includes platforms like CoinSpot, Independent Reserve, and Swyftx.
Crypto compliance: The ATO has access to transaction data from Australian cryptocurrency exchanges under its formal data-matching program. Failure to declare crypto gains is treated as a serious non-compliance matter. Keep detailed records of every transaction including the AUD value at the date of acquisition and disposal.
Frequently Asked Questions
When can I lodge my 2025 tax return?
You can lodge from 1 July 2025 via myTax on myGov. However, it is strongly recommended to wait until late August 2025, as this allows your income statement, bank interest data, health fund information, and other pre-fill sources to be fully loaded by the ATO.
How long does an ATO tax refund take in 2025?
Most electronic lodgments via myTax are processed within 2 weeks. If your return is selected for review or if there are discrepancies, it may take longer. Paper lodgments can take 10 weeks or more. Track your return status through myGov.
Do I need a tax agent to lodge my return?
No. Most individuals with straightforward tax affairs can lodge easily via myTax for free. A tax agent adds the most value if you have complex income (rental properties, investments, business income), multiple deductions to optimise, or if you’ve had a significant life change such as starting a business, selling property, or receiving an inheritance.
What is the tax-free threshold for FY2025?
The tax-free threshold remains $18,200 for the 2024–25 income year. You can claim the tax-free threshold from only one employer at a time. If you have two or more jobs, claim it from your primary employer only — claiming it from multiple employers will result in too little tax being withheld and a bill at tax time.
What is the superannuation guarantee rate for FY2025?
The superannuation guarantee (SG) rate is 11.5% from 1 July 2024 to 30 June 2025. Employers must contribute this percentage of eligible employees’ ordinary time earnings to a complying super fund. The rate increases to 12% from 1 July 2025 onward under legislated increases.
Can I claim a deduction for working from home part-time?
Yes. You can claim deductions for the actual hours you worked from home using either the fixed-rate method (70c/hr) or the actual cost method. You don’t need a dedicated office room under the fixed-rate method — you simply need to be genuinely performing work duties, not just being available on standby.
What records do I need to keep for tax purposes?
The ATO requires you to keep records for 5 years from when you lodge your return (or 5 years from when you prepare the record, whichever is later). This includes receipts, invoices, bank statements, logbooks for vehicles, and any written evidence supporting your deduction claims. Digital copies of records are accepted by the ATO.
Is the instant asset write-off available in FY2025?
Yes. For FY2025 (1 July 2024 – 30 June 2025), small businesses with an aggregated annual turnover under $10 million can immediately deduct eligible assets costing less than $20,000. Each asset under $20,000 qualifies separately. Assets costing $20,000 or more must be placed in the small business depreciation pool.
Ready to lodge your 2025 tax return?
Use the ATO’s free myTax service via myGov, or consult a registered tax agent for complex situations. Lodge early, keep your records, and claim every deduction you’re entitled to.
Visit ATO myTax →
