Other Key Rates and Thresholds

HELP Repayment Thresholds – 2018/19

The Higher Education Loan Programme ('HELP') offers Commonwealth loans to eligible students to assist them with paying their higher education fees and to study overseas. A HELP debt is repaid through the taxation system, based on a taxpayer's HELP 'repayment income'. HELP repayment income is the sum of the taxpayer's:

• taxable income;
• total net investment loss;
• reportable fringe benefits;
• exempt foreign employment income; and
• reportable superannuation contributions.

HELP Repayment Income Thresholds and Rates1,2

• From 1 July 2017, taxpayers living overseas and earning income that exceeds the minimum repayment threshold will be required to make compulsory repayments towards their debt.
• 
  The relevant repayment rates and thresholds outlined above have been amended to include the introduction of a lower minimum repayment threshold and a maximum repayment rate of 10%. These changes will commence in the 2019/20 income year.

Genuine Redundancy Payments – Tax-free Amounts

The tax-free amount of a genuine redundancy payment in 2018/19 is $10,399 plus $5,200 for each completed year of service.

Per Kilometre Claims for Car Deductions

The 2018/19 cents per kilometre (km) rate for car deductions (up to a maximum of 5,000 business kms per car) is 68 cents per kilometre.

Car Depreciation Cost Limit1

The depreciation cost limit applies to the income year in which the car is acquired or first held.

1     A hearse is not subject to the depreciation car limit.

Prime Cost and Diminishing Value Rates (150% and 200%)

For most items of plant and equipment acquired* on or after 10 May 2006, the diminishing value method ('DVM') rate was increased from 150% to 200%. This means that the DVM depreciation rate is twice the prime cost ('PC') rate of depreciation for such assets.

Note(*): For these purposes, a taxpayer acquires an asset when they commence to hold it (e.g., on settlement of a contract).   Therefore, a taxpayer may acquire an asset on or after   10 May 2006 under a contract entered into before 10 May 2006, and still use the 200% DVM rate.

The 200% DVM depreciation rates apply to new and second-hand assets, including those  with statutory caps (e.g., certain trucks). The rates also apply to both business assets and investment assets (e.g., assets used in a rental property).

However, the 200% DVM depreciation rates do not apply to taxpayers using the SBE rules and assets classes for which there are special arrangements (e.g., new horticultural plants).

Furthermore, the 200% DVM depreciation rates cannot be used for certain intangible depreciating assets. That is, depreciation deductions for these assets must be calculated using the PC rates. The types of assets excluded from the 200% DVM depreciation rates are:

• in-house software;
• intellectual property assets (except copyrights in a film);
• spectrum licences;
• datacasting transmitter licences; and
• telecommunications site access rights.

The following table sets out the effective PC and DVM rates of depreciation that apply to an asset based on its effective life.

For example, a taxpayer may choose to use the Commissioner’s effective life of 10 years     for a particular asset. In that case, the PC rate of depreciation would be 10% (i.e., 100% divided by 10 (years)). The equivalent DVM rate of depreciation would be either 15% (at 150% DVM rates) or 20% (at 200% DVM rates) depending on whether the depreciating asset was acquired before 10 May 2006 or on or after 10 May 2006.