From 1 July 2024, superannuation contribution caps will rise for the first time in three years following data from the ABS showing strong wages growth.
Concessional Contributions
· The annual concessional contribution cap is increasing from $27,500 to $30,000 from 1 July 2024.
· The Superannuation Guarantee rate also increases from 11 per cent to 11.5 per cent from 1 July 2024.
Concessional contributions are pre-tax contributions including compulsory super payments (Superannuation Guarantee) from employers, salary sacrifice and voluntary contributions that can be then claimed as a tax deduction. These contributions are taxed at 15 per cent.
You can make catch-up concessional contributions if you did not contribute up to the cap amount in the prior five years, if your superannuation balance is less than $500,000 in the prior year (for example, at 30 June 2023 to make catch-up contributions this year).
Non-Concessional Contributions
· The annual non-concessional contributions cap is increasing from $110,000 to $120,000 from 1 July 2024.
Non-concessional contributions are those made after-tax. To make non-concessional contributions your total superannuation balance must be less than $1.9 million on 30 June 2024.
Under the “bring forward” rule for non-concessional contributions, up to three years’ worth of non-concessional contributions can be made in one year. From 1 July 2024 to trigger the three-year bring-forward rule your total superannuation balance must be no more than $1.66 million.
If you have any questions about superannuation or planning for retirement, please contact me on (02) 9908 9888, or email wealth@edneyryan.com.au.