The amount you are allowed to contribute to super will increase from 1 July 2024 to $30,000 from $27,500 for concessional super contributions and to $120,000 from $110,000 for non-concessional contributions. The contribution caps are indexed to wage growth depending on the prior year’s December quarter’s average weekly ordinary times earnings (AWOTE). The following are some areas affected by indexation include:
- the government super co-contribution – income threshold
- the super guarantees maximum contribution base
- the tax-free thresholds for repeated payments
- the CGT contribution cap
For those with the disposable income to contribute, super can be very attractive with a 15% tax rate on concessional super contributions and tax-free withdrawals when you retire. For business owners who might have had an exceptional year or sold their business, it is an opportunity to get more into super.
If you know you will have a capital gains tax liability in a specific year, you may be able to use ‘catch up’ contributions to make a larger as compared to the usual contribution and use the tax deduction to help offset your capital gain tax bill.
But, this strategy will only be effective if you meet the requirements to make catch-up contributions and file a Notice of intent to claim or vary a deduction for personal super contributions with your super fund.
Using the Bring Forward Rule
The bring forward rule allows you to bring forward up to 2 years’ worth of future non-concessional contributions into the year you contribute – this is supposing your total super balance allows you to contribute and you are under age 75. If you use the bring forward rule prior to 30 June, the maximum contribution can be $330,000. However, if you wait to trigger the bring forward until on or after 1 July, then the maximum contribution can be $360,000.
Catch Up Contributions
If your superannuation balance is less than $500,000 before 30 June, and you want to quickly maximise the amount you hold in super, you can use any unused concessional super contributions amounts from the last 5 years.
Transfer Balance Cap Unchanged
The general rate for the transfer balance cap (TBC) will remain at $1.9 million for 2024-25 which limits how much money you can transfer into a tax-free retirement account. The TBC is indexed by the December Consumer Price Index (CPI) each year.
Revised Stage 3 Tax Cuts Confirmed for 1 July
The amended stage 3 tax reduction has passed Parliament and will come into effect on July 1, 2024. Before the latest tax rates come into effect, review any salary sacrifice agreements to ensure that they will continue to generate the desired results.
Residential Individuals
| Tax Rate | 2023-24 | 2024-25 |
| 0% | $0 – $18,200 | $0 – $18,200 |
| 16% | $18,201 – $45,000 | |
| 19% | $18,201 – $45,000 | |
| 30% | $45,001 – $135,000 | |
| 32.5% | $45,001 – $120,000 | |
| 37% | $120,001 – $180,000 | $135,001 – $190,000 |
| 45% | >$180,000 | >$190,000 |
Non-Residential Individuals
| Tax Rate | 2023-24 | 2024-25 |
| 30% | $0 – $135,000 | |
| 32.5% | $0 – $120,000 | |
| 37% | $120,001 – $180,000 | $135,001 – $190,000 |
| 45% | >$180,000 | >$190,000 |
Working Holiday Market
| Tax Rate | 2023-24 | 2024-25 |
| 15% | 0 – $45,000 | 0 – $45,000 |
| 30% | $45,001 – $135,000 | |
| 32.5% | $45,001 – $120,000 | |
| 37% | $120,001 – $180,000 | $135,001 – $190,000 |
| 45% | >$180,000 | >$190,000 |