Tax and super changes, 1 July 2024
ESSSuper - 24 Jun 2024
Effective 1 July 2024, there are important changes to tax and super that you need to know about, as they may impact you.
Staying informed will help you make the most of your retirement savings and avoid any surprises. Here's what you need to know to keep your super on track with the new rules.
Increase to the ESSS DB Fund employer additional contribution rate
If you're an ESSS Defined Benefit (DB) Fund member and reach your maximum benefit multiple, your employer will make extra contributions to your ESSSuper Accumulation Plan account based on a percentage of your salary.*
Effective 1 July 2024, the employer's additional contribution rate into the Accumulation Plan will increase from 8% to 9%. This rate will further increase in the future:
| |
Financial year |
| 2020-21 |
2021-22 |
2022-23 |
2023-24 |
2024-25 |
2025-26 |
2026-27 |
| Rate |
3% |
6% |
6% |
8% |
9% |
11% |
12% |
These extra contributions will count towards your concessional contributions cap. For more information about contribution caps, please check our Tax and super web page.
GENERAL TAX AND SUPER CHANGES EFFECTIVE FROM 1 JULY 2024
From 1 July 2024, there will be significant changes to tax rates and super thresholds in Australia. These updates aim to provide tax relief, support the economy, and help individuals save more for their retirement. Below is an overview of the key changes.
For further information, please visit the Australian Tax Office (ATO) website at ato.gov.au
Removal of the low rate cap amount
The low rate cap amount of $235,000 will be removed. This cap applied to anyone that had reached preservation age but was less than 60 years old. The preservation age phase in to age 60 is now complete. This means that the minimum preservation age is 60 and the low rate cap has been removed. From 1 July 2024, any taxable (taxed element) unpreserved component withdrawn from super will be taxed at 22% for anyone under age 60.
Superannuation guarantee (SG) contribution rate increase
From 1 July 2024, the rate for SG contributions into Accumulation Plan accounts will increase from 11% to 11.5%. This means employers will contribute an additional 0.5% of their employees' ordinary time earnings into their super fund.
Concessional contributions cap
The cap on concessional contributions (pre-tax contributions) will increase from $27,500 to $30,000. This includes employer contributions and any amount you salary sacrifice into super, allowing you to contribute more to your super on a pre-tax basis.
For more information about contribution caps, please check our Tax and super web page.
Non-concessional contributions cap
The non-concessional contributions cap (after-tax contributions) will increase from $110,000 to $120,000. This change allows individuals to contribute more to their super from their after-tax income.
Similarly, the total super balance thresholds for the non-concessional contributions bring-forward rule will increase:
- from $330,000 to $360,000
- from $220,000 to $240,000
- from $110,000 to $120,000.
The bring-forward rule allows individuals under 75 to make non-concessional contributions of up to three times the annual cap in a single year by using the next two financial years' worth of cap. Whether you can bring forward two or three years' worth of non-concessional contributions depends on your total super balance.
| Total super balance as at 30 June 2024 |
First year non-concessional contribution cap from 1 July 2024 |
Period brought forward |
| Less than $1.66 million |
$360,000 |
3 years |
| $1.66 million to less than $1.78 million |
$240,000 |
2 years |
| $1.78 million to less than $1.9 million |
$120,000 |
Nil |
| $1.9 million |
Nil |
Nil |
For more information about contribution caps and the bring-forward rule, please check our Tax and super web page.
Untaxed plan cap
The untaxed plan cap, which limits the amount of untaxed super benefits you can receive at concessional tax rates, will increase from $1.705 million to $1.78 million.
Government co-contributions
The government co-contribution scheme allows the government to contribute up to $500 to your super when you make a personal contribution. The income thresholds for receiving the government co-contribution will increase:
- lower threshold from $43,445 to $45,400
- upper threshold from $58,445 to $60,400.
Income tax rate changes
For further information including income tax rate changes, please visit the Australian Tax Office (ATO) website at ato.gov.au
Listen to our Exploring Super podcast, which delves into some of the key changes impacting super in the Federal Budget 2024-25.
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WE'RE HERE TO HELP
You can book an appointment with one of our Member Education Consultants for general advice about your ESSSuper account(s). If you're looking for personal advice relating to your financial situation or needs, our qualified Financial Advisers** can help.
To request an appointment or if you have any questions, please contact us.