New superannuation thresholds coming into effect from 1 July 2024

ByRussell Lees, Senior Adviser

The ATO recently released the superannuation rates and thresholds that will apply from the new financial year. Some thresholds are changing, and some remain at the current level.

Concessional Contributions

Concessional contributions to superannuation are payments made into your super fund that are taxed at a concessional rate. These include compulsory employer contributions, any additional voluntary contributions you may make, and any amounts you contribute for which you claim a tax deduction. The annual cap for concessional contributions is currently $27,500.

  • From 1 July 2024, the new concessional contribution cap will be $30,000


This change also impacts the concessional contributions that can be made under the five-year carry forward rules by individuals who have a total super balance at the previous 30 June of less than $500,000. The five-year carry forward total super balance threshold is not indexed.

Individuals who have a total super balance at 30 June 2024 below $500,000 will have a concessional contribution cap of up to $135,000 in 2024/25. This includes a maximum of $25,000 for 2019/20 and 2020/21, as well as $27,500 for 2021/22 and 2022/23.

Non-concessional Contributions

Non-concessional contributions to superannuation are personal contributions made from after-tax income and are not subject to the 15% contributions tax that applies to concessional contributions. These contributions are capped at $110,000 per year, but under certain conditions individuals can bring forward up to two years of contributions, allowing them to contribute up to $330,000 over a three-year period. However, this is only possible if the individual’s total super balance is less than $1.9 million.

  • From 1 July 2024, the new non-concessional contribution cap will be $120,000


Superannuation Guarantee Contributions

Superannuation Guarantee Contributions (SGC) are mandatory employer contributions made to eligible employees’ superannuation funds. These contributions are a form of retirement savings plan for employees in Australia. Employers are required to contribute a percentage of an employee’s earnings into their superannuation fund, which is currently set at 11% per annum.

  • From 1 July 2024, the new Superannuation Guarantee Contribution rate will be 11.5%


Transfer Balance Cap

The transfer balance cap limits the amount of superannuation that can be used to start a pension, where the investment returns are generally tax free. The transfer balance cap was introduced from 1 July 2017 at $1.6 million and is indexed periodically to the consumer price index (CPI) in $100,000 increments. From 1 July 2021, it increased to $1.7 million and to $1.9 million from 1 July 2023.

  • The transfer balance cap will remain at $1.9 million from 1 July 2024

 
Total Super Balance

The value of the general transfer balance cap is used to determine the total super balance threshold which impacts eligibility for making non-concessional contributions and spouse contributions, as well as receiving Government co-contributions.

  • The Total Super Balance will remain at $1.9 million from 1 July 2024

Please don’t hesitate to contact me should you have any questions. 

Kauri Wealth Management is a Fee for Service investment advisory business and as such my advice is built around ongoing personal relationships with my client base. Personalised independent advice is backed up by a breadth of industry knowledge.

I accept a limited number of new clients each year and would be happy to discuss this further with you. Please don’t hesitate to contact me.

Russell Lees
Senior Adviser
Phone: +61 439 852 963
Email: russell@kauriwealth.com.au

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