Annual concessional contributions caps to rise

Following on from the release of the latest Average Weekly Ordinary Time Earnings Index, contribution caps are to rise from 1 July 2024.

The standard concessional contribution cap, which includes employer, salary sacrifice and personally deductible contributions, will increase from $27,500 to $30,000.

The non-concessional contribution (NCC) cap will increase from $110,000 to $120,000. This also means that maximum non-concessional cap, available under the bring-forward provisions, will increase from $330,000 to $360,000.

Coinciding with the increase in contribution caps is a change to the Total Superannuation Balance (TSB) Threshold, which is used to determine the maximum amount of bring-forward non-concessional contributions cap is available to an individual. This can be summarised in the following table:

TSB at 30 June 2024Maximum available NCC capMaximum available NCC period
<$1.66 million$360,0003 years
$1.66 - $1.78 million$240,0002 years
$1.78 - < $1.9 million$120,0001 year
$1.9 million and above$0N/A

Individuals, who have a TSB less than $500,000, may also be eligible to use the carry-forward concessional contribution provision. This rule, that allows individuals to contribute unused concessional contributions on a 5 year rolling period, will also adjust in line with the increase in caps.

As of 1 July, when the contribution caps are indexed, the total amount able to be contributed will go from $157,000 to $162,500, assuming no previous concessional contributions at all in the last five years.

In addition to the increase in contribution caps, several other thresholds are also changing:

  • The eligibility threshold for Government Co-Contributions
  • The CGT contribution cap (relevant following the sale of eligible small business assets)

The rules around superannuation contributions can be complicated. If you are thinking of making contributions to super, speak with your accountant or advisor so they can help you unravel the complexity and identify strategies to maximise the tax benefits.

The General Balance Transfer Cap, which is a limit on the total amount of super you can transfer into tax free retirement income streams during the ‘retirement phase’ of superannuation, is set to remain at $1.9 million for the 2025 financial year.

With these changes coming into affect from 1 July 2024, it is important to consider your overall contribution strategy, and to ensure you are utilising the contribution limits in the most tax effective way.

 

Expertise and support when you need it.

Want to know more about these changes, or how Bentleys can help make the most of your business? Make a time for a chat with a Bentleys business advisor. We can help you to get where you want to be.

 


Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.