16 July 2024
From 1 July 2024, several changes have been rolled out that will impact your super fund. Most notably, your employer will be paying 0.5% more super into your account under changes to the superannuation guarantee.
Employers pay more super
The superannuation guarantee is the percentage of your wage your employer is legally required to pay into your super account. From 1 July 2024, it increases to 11.5% from 11% - that likely means more super in your account this year
The government has legislated the superannuation guarantee to settle at 12% in 2025, so after several successive rises you’ll see another 0.5% rise on 1 July 2025 and then we shouldn’t see any further increases to the guarantee for some time.
What does this mean for me?
Some employers pay super on top of salaries, and some include super in salaries. If super is included in your salary, the superannuation guarantee rise may mean you see a slight decrease in your take home pay this financial year.
Tax cuts
This year 13.6 million Australians will have more money in their pocket thanks to widespread tax cuts. It’s part of the government’s measures to provide some cost-of-living relief.
What does this mean for me?
Tax on annual earnings between $18,201 – $45,000 decreases from 19% to 16% and on earnings between $45,001 – $135,000 it decreases from 32.5% to 30%.
You can calculate just how much tax you’ll save over the financial year by using this Tax Cut Calculator.
All Australian taxpayers are entitled to the tax-free threshold of $18,200 – so the first $18,200 you earn is tax free each year. If you earn, for example, $75,000 a year your income between $18,201 and $45,000 will then be taxed at 16% (down from 19%).
The final $29,999 of your taxable income will be taxed at 30% (down from 32.5%). Because income tax works in this way, even higher income earners who earn over $135,000 a year will benefit from these tax cuts.
Tax cuts and putting more in your super
If you earn $60,000 this financial year (before tax) the tax cuts mean you’ll get an extra $22 in your pay packet each week. Adding $10 a week to your super before tax this financial year could help you increase your super, while your take-home pay would still be $16 a week more than last year!
Concessional contribution cap increases
The concessional contribution cap will be bumped up from $27,500 to $30,000 from 1 July 2024.
What does this mean for me?
You can make contributions of up to $30,000 into your super account and you’ll be taxed on those contributions at the concessional rate of 15% rather than your normal income tax rate.
Concessional contributions work out as a tax effective way to save because for all income earners in Australia earning over $45,000 a year the income tax rate is more than 30%. The concessional contributions tax rate is only available to those earning less than $250,000 a year.
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