The 2024/25 Financial Year brings minor regulatory changes that may present opportunities to update your superannuation and investment plans.
Increase to Superannuation Contribution Caps
Superannuation contributions are limited each year based on annual caps, which have now increased for the 2024/25 Financial Year.
- Concessional Contribution Caps: Increased from $27,500 to $30,000 per annum. This cap covers superannuation guarantee payments from employers, salary sacrificed contributions, and personal contributions that you intend to claim as a tax deduction.
- Non-Concessional Contribution Caps: Increased from $110,000 to $120,000 per year. Non-concessional (after-tax) super contributions are payments into superannuation from savings or taxed income for which no tax deduction was claimed.
Increase to Superannuation Guarantee Rates
From 1 July 2024, Superannuation guarantee rates, the mandatory superannuation contributions employers make on behalf of salaried employees, have increased from 11% to 11.5%.
Changes to Personal Income Tax Rates and Thresholds
As of 1 July 2024, the personal tax rates for Australian tax residents have changed:
| Thresholds in 2023–24 | Rates in 2023–24 | Thresholds in 2024–25 | Rates in 2024–25 |
|---|---|---|---|
| $0 – 18,200 | Tax-free | $0 – 18,200 | Tax-free |
| $18,201 – 45,000 | 19% | $18,201 – 45,000 | 16% |
| $45,001 – 120,000 | 32.5% | $45,001 – 135,000 | 30% |
| $120,001 – 180,000 | 37% | $135,001 – 190,000 | 37% |
| Over $180,000 | 45% | Over $190,000 | 45% |
What Opportunities Could These Changes Offer?
With the changes to personal tax rates and thresholds, you may be receiving more take-home pay than previously. The increase in superannuation cap increases may enable you to salary sacrifice a little bit more while staying within the caps. You may also consider increasing your non-concessional contributions. Additionally, your employer will be required to increase their regular contributions to your superannuation by 0.5%.
Keep a close eye on your first few payslips to check out how much extra you might be able to contribute to your superannuation while maintaining the same take-home income. However, before making additional contributions, you need to consider previous years’ contributions, especially if you previously brought forward future years’ caps. Exceeding the caps or making contributions when you are not eligible to do so may result in penalties.
Whilst there may not have been any major changes to the superannuation landscape, all these smaller changes combined may create a perfect opportunity for you to review your current superannuation and investment strategies.
If you need help determining what strategy may work best for you, it’s the perfect time to engage or reengage with your financial planner to take full advantage of these changes.
The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice, or invitation to purchase, sell, or otherwise deal in securities or other investments. Before making any decision regarding a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.
