The new financial year is approaching and with it comes changes to superannuation and tax that are expected to affect both employers and their employees.
Key Changes
Tax Cuts
The government predicts around 13.6 million taxpayers will see reduced taxes with the new ‘Stage 3 tax cuts’ taking effect on July 1st. These tax reductions are expected to ease the financial burden for many, offering relief amidst rising living costs.
The accompanying table shows the savings based on various income levels, calculated using the official Government tool found at taxcuts.gov.au.
| Taxable income | Tax payable in 2023/24 | Tax payable from 1 July 2024 | Tax saving |
| $40,000 | $4,367 | $3,713 | $654 |
| $80,000 | $18,067 | $16,388 | $1,679 |
| $120,000 | $31,867 | $29,188 | $2,679 |
| $160,000 | $47,467 | $43,738 | $3,729 |
| $200,000 | $64,667 | $60,138 | $4,529 |
Increases to superannuation contribution caps
From 1 July, the concessional (pre-tax) and non concessional (after-tax) contribution caps will increase as outlined below.
| Cap | In 2023/24 | In 2024/25 |
| Standard concessional contribution cap | $27,500 | $30,000 |
| Annual non-concessional contribution cap | $110,000 | $120,000 |
| Maximum non-concessional contribution | $330,000 | $360,000 |
Changes to eligibility thresholds for non-concessional contributions cap
Slight reductions will apply to total super balance thresholds that determine the eligibility to make non-concessional contributions and utilise the bring-forward rules. Your super balance must be below $1.9 million on or prior to 30 June to make a non-concessional contribution in the 2024 and 2025 Financial Years. However, the total super balance thresholds also need to be met to utilise the ‘bring-forward rule’ to make even larger contributions by ‘bringing-forward’ your non-concessional contributions from a future year. The reductions are demonstrated in the below table.
| 2023/24 | 2024/25 | ||
| Total super balance at 30/06/2023 | Non-concessional contribution cap | Total super balance at 30/06/2024 | Non-concessional contribution cap |
| $1.9m + | $0 | $1.9m + | $0 |
| $1.79m to < $1.9m | $110,000 Annual cap only | $1.78m to < $1.9m | $120,000 Annual cap only |
| $1.68m to < $1.79m | $220,000 (Two-year bring-forward) | $1.66m to < $1.78m | $240,000 (Two-year bring-forward) |
| < $1.68m | $330,000 (Three-year bring-forward) | < $1.66m | $360,000 (Three-year bring-forward) |
For example, to utilise the three-year bring-forward in:
• 2023/24, the total super balance must have been less than $1.68m on 30 June 2023, and
• 2024/25, the total super balance needs to be less than $1.66m at 30 June 2024.
Other conditions apply.
Superannuation Guarantee rate is increasing
Starting 1 July 2024, the Superannuation Guarantee contribution rate will rise to 11.5%, and it will further increase to 12% from 1 July 2025. Additionally, from 1 July 2024, the quarterly maximum contribution base will increase from $62,270 to $65,070. This is the maximum quarterly income amount on which Superannuation Guarantee contributions must be paid.
Preservation age is increasing to 60
The preservation age, that is, the earliest that super may be accessed under ‘retirement’, will increase from age 59 to age 60 from 1 July 2024.
Increases to other key thresholds
From 1 July, other thresholds are increasing including the income thresholds that determine eligibility for Government co-contributions and the tax-free redundancy amounts. More information on other thresholds can be found at ato.gov.au under ‘Key super rates and thresholds’.
Other Super considerations
- Superannuation Guarantee contributions for the April to June 2024 quarter are due by 28 July 2024.
- If these contributions are made to the super fund in July 2024, then they are tax deductible in the 2024/25 and count towards the employee’s concessional contribution cap in 2024/2025 even though they may relate to an employee’s ordinary time earnings in 2023/24.
- Salary sacrifice contributions may assist eligible employees to maximise the benefits of their tax savings in 2024/25 as salary sacrifice enables contributions to be made with pre-tax dollars.
- Employers and employees need to ensure that salary sacrifice arrangements are entered into before the work is performed. Any salary, bonuses or entitlements that accrue before the arrangement is set up cannot be sacrificed into super.
Employees wanting to salary sacrifice in the next financial year should arrange this with the employer before 1 July.
Reference: CSSN Partner Communication – 2024 Winter Update. ‘Important Tax and super changes coming from 1 July