Important Updates to Superannuation Contributions: Key Changes Effective from 1 July 2024
The law changes in superannuation contributions will affect both employers and employees and where made effective from 1 July 2024. These changes, outlined by the Australian Taxation Office (ATO), are part of the Federal Government’s ongoing adjustments to superannuation regulations. Below are the key updates:
1. Increase in Superannuation Guarantee Contribution (SGC) Rate
From 1 July 2024, the Superannuation Guarantee Contribution (SGC) rate will increase from 11% to 11.5%. This rate determines the mandatory super contributions that employers must make on behalf of their employees, impacting overall superannuation growth for individuals. The SGC rate will further increase to 12% effective from 1 July 2025.
2. Increased Concessional Contribution Cap
The concessional contribution cap will increase from $27,500 to $30,000 per year. Concessional contributions, which are taxed at a lower rate, include employer contributions, salary sacrifice contributions, and personal contributions for which a tax deduction is claimed. Unused contributions from previous years can be carried forward, allowing you to maximise your concessional contributions.
3. Increased Non-Concessional Contribution Cap
The non-concessional contribution cap, which applies to after-tax contributions, will increase from $110,000 to $120,000. This change allows individuals more flexibility to contribute larger amounts from after-tax income into their super funds.
4. Upcoming Changes Effective from 1 July 2026
From 1 July 2026, employers will be required to pay superannuation contributions on payday instead of the current quarterly system. This change, known as “Payday Superannuation,” aims to enhance the timeliness of contributions, allowing super balances to grow faster due to more frequent deposits.
These updates reflect ongoing efforts by the government to improve the superannuation system and provide more opportunities for Australians to build their retirement savings effectively.
If you have any questions or need advice on how these changes may affect your contributions, please feel free to contact our office. We recommend reviewing your superannuation strategy in light of these updates to maximise the benefits.
For further details, you can read more about these changes on the ATO website:
https://www.ato.gov.au/about-ato/new-legislation/in-detail/superannuation/payday-superannuation
https://www.ato.gov.au/tax-rates-and-codes/key-superannuation-rates-and-thresholds/super-guarantee
