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From the 1st of July, the Australian Government’s Stage three tax cuts came into effect. Implementation of this reform has been discussed for years, but the final version looks different from the initial draft. While most of these reforms have focused on employees and households, business owners in Perth also need to pay close attention. For instance, lower income tax may sound like a simple win, but the flow-on effects to business cash flow, consumer demand and tax planning are more complex.
This guide breaks down what has been changed, how it affects business owners, what planning opportunities are available and why it may be worth having a word with a business tax accountant Perth.
More than a year since the Stage 3 tax cuts came into force, many Perth business owners are now seeing the practical impacts — from slightly higher take-home pay to improved cash flow. However, the flow-on effects on consumer spending, inflation, and long-term tax planning remain key areas of focus heading into the 2025–26 financial year.
Stage 3 was designed as the final step in the three-part tax reform process. These reforms are focused on simplifying brackets and reducing tax for middle-income earners. After having multiple discussions, the Australian government has revised the plan to make the cuts more balanced across incomes:
The Stage 3 tax cuts explained by the following snapshot of the new tax brackets effective from 1st July 2024:
| Income Range | Previous Marginal Rate | New Stage 3 Rate | Key Changes |
| $18,201 – $45,000 | 19% | 16% | Lower rate in this bracket |
| $45,001 – $135,000 | 32.5% | 30% | Expanded middle bracket |
| $135,001 – $190,000 | 37% | 37% | Bracket retained |
| $190,001+ | 45% | 45% | Top rate threshold lifted from $180,000 to $190,000 |
If you are a sole trader, a partner in a partnership, or you pay yourself a wage as a director of your company, your personal tax amount will shift. For example, a business owner in Perth drawing a monthly wage of $100,000 could now see savings of roughly $2,000 – $3,000 a year compared with the old rates. This means many individuals could directly benefit from Stage 3 Tax Cuts, with extra disposable income left to reinvest into their businesses.
However, tax reforms are not just about your own paycheck. Some of their broader influences include:
For businesses that are directly linked to hospitality and retail, it is suggested to consult with an accountant in Perth to get the most out of the Stage 3 Reforms.
Tax cuts can be an opportunity to revisit the ITR filing strategy. In this context, the savings may not be huge. Still, their integration with smart planning can create valuable benefits for those who explore tax savings strategies Australia in a structured way.
If you operate through a company, the balance between salary and dividends may need adjusting under the new brackets. As of 2025, wages up to $135,000 are taxed at 30%, which makes them more attractive to save about 2.5% of taxes from previous investment. The right mix depends on your setup, but it’s worth a review now that the brackets have shifted with the help of registered tax accountants.
Once you’ve considered how you pay yourself, the next step is the timing of when amounts flow in and out of the business. In this context, preparing 12 months of insurance with the help of accounting services Perth, renewing software subscriptions or completing bookkeeping before 30th June can bring deductions forward into the current year.
On the income side, delaying invoices does not disrupt the cash flow, which can keep more of your taxable income in the 30% bracket. This is especially relevant in Perth, where businesses are closely watching the federal budget tax changes that coincide with these reforms.
Stage 3 tax cuts Perth are unlikely to cover a major expansion on their own, but they can create a tangible boost in working capital. For instance, a business owner on a $120,000 salary now keeps around $2,200 more each year. You can add that tax to tax-effective initiatives like the instant asset write-off and the impact grows.
The instant write-off applies to eligible assets costing less than $20,000 that are first used or installed before 30th June 2025. For example, if a cafe in Perth upgrades a coffee machine worth $18,000, the deduction cuts taxable income by the full amount in the same year. This occurrence can be facilitated with the help of tax consultants Perth.
Ensure that you review carefully vehicle outlays, home-office utilisation, phone/laptop depreciation, and professional costs. These credits have the potential to make experimental projects profitable investments while reducing the tax reform impact on small businesses overall.
Lastly, it is important to keep in mind that not every tax strategy is worth doing. In Perth, family trusts and complex distributions are popular in property and small-business plans, although those that indicate actual activity should be used. Thus, the planning should always be in line with your long-term objectives and consulting with an accounting firm Perth.
Online calculators and tax packages are useful, but Stage 3 Tax Cuts demonstrate that expert advice is valuable.
An accountant based in Perth is familiar with federal tax law and the special business climate of Western Australia. If you’re a growing venture, engaging small business accounting services ensures you don’t miss these regional considerations.
Personal tax goes together with business tax, GST, superannuation, payroll tax and fringe benefits. Due to this intricacy, a professional is able to define whether it is more beneficial to take a higher salary or distribute profits differently. A small business accountant Perth will typically model these outcomes based on your unique numbers.
Wrong withholding or reporting may lead to penalties. A tax agent makes sure that you do everything and saves you the hassle of the ATO audit. A professional adviser can make the process easier in the event of an audit. Whether you seek a tax accountant Perth or explore a team of tax consultants, the assurance of compliance adds peace of mind.
High-ranking accountants do not check compliance only. They assist you to planning over time, simulating cash flow entries of new bracketages, and changing structures as your business grows. Finding the right accountant for tax purposes means aligning both short-term compliance and long-term efficiency.
The costs of advice are offset by the savings, superior decision-making, and reduction of risk in most cases. Several companies offer an initial tax health check, which is a low-cost method of estimating whether more detailed advice is required. Thus, a routine check by a tax return accountant can highlight gaps and opportunities you might miss.
Also read: How to Reduce Your Tax Bill Legally in Perth
Stage 3 tax reform reduces rates and redesigns brackets, and provides Perth business owners with more than a small boost in take-home pay. These changes not only change the order of payment of the salary and dividends but also influence the deduction timing and create the pathway to such benefits as an immediate write-off of assets. These are expedient levers that shape cash flow decisions and decisions on reinvestment. Thus, professionally guided tax advice is a valuable consideration.