Superannuation rates and thresholds for 2024-25

Superannuation in Australia: Key Changes for the 2024-25 Financial Year

As CPAs, financial advisors, superannuation consultants, and wealth managers, staying on top of superannuation legislation is vital for effective client guidance. With the 2024-25 financial year approaching, it’s essential to understand the changes in rates and thresholds impacting superannuation contributions and strategies.

Key Updates

• Superannuation Guarantee (SG) Rate: The SG rate is scheduled to rise to 11.5% from July 1, 2024. This means employers must contribute a minimum of 11.5% of an employee’s ordinary times earnings (OTE) into their super fund.
• Concessional Contributions Cap: The concessional contributions cap (which includes employer SG contributions and personal tax-deductible contributions) is expected to be indexed to $30,000 from July 1, 2024.
• Non-Concessional Contributions Cap: The non-concessional contributions cap (after-tax contributions) will remain at $110,000 per year. The bring-forward rule, allowing individuals to contribute up to $330,000 over three years, also remains in place.

Implications for Your Clients

These changes provide opportunities to revisit client superannuation strategies. Here are some key considerations:

• Salary Sacrifice Arrangements: The increased SG rate may reduce headroom for additional concessional contributions through salary sacrifice. Review clients’ arrangements to optimize their contributions.
• Unused Concessional Cap Carry-Forward: Advise clients with total super balances below $500,000 about utilizing unused concessional contribution caps from previous years.
• Superannuation as a Wealth-Building Tool: With the potential for increased contributions, emphasize superannuation’s role in long-term wealth accumulation and retirement planning.

Staying Informed

The Australian Taxation Office (ATO) is the primary source for updated superannuation information. Visit ATO website: www.ato.gov.au for the latest thresholds and legislative changes.

Disclaimer: This blog is for informational purposes only and should not be taken as professional financial advice.