With the new financial year upon us, significant changes to superannuation contributions occurred from 1 July 2024. These updates will impact how much you can contribute to your superannuation, an essential vehicle for retirement savings.
Concessional Contribution Cap Increase
One of the fundamental changes for FY25 is the increase in the concessional contribution cap. This cap will rise from $27,500 in FY24 to $30,000 in FY25. Concessional contributions are made before tax and include employer contributions (Superannuation Guarantee), salary sacrifice, and any personal contributions made to claim a tax deduction.
Superannuation Guarantee (SG) Rate Increase
The Superannuation Guarantee rate, which is the minimum percentage of your salary that your employer must contribute to your super fund, has increased from 11% to 11.5%. This rate is set to rise further to 12% on 1 July 2025. This increase means more compulsory savings being directed into your superannuation, enhancing your retirement fund over time.
Non-Concessional Contribution Cap Increase
Alongside the rise in concessional contributions, the non-concessional (after-tax) contribution cap has also increased. For FY25, the cap has been raised from $110,000 to $120,000. This allows individuals to contribute more from their post-tax income, potentially boosting their super balance significantly.
Bring-Forward Rule
The bring-forward rule, which allows you to make up to three years’ worth of non-concessional contributions in a single year, has also been adjusted. The bring-forward cap has increased from $330,000 over three financial years to $360,000. This is particularly useful for those who want to maximise their super contributions in a shorter period.
Summary
- Concessional Contribution Cap: Increased to $30,000.
- Non-Concessional Contribution Cap: Increased to $120,000.
- Superannuation Guarantee Rate: Increased to 11.5%, with a further increase to 12% planned for 1 July 2025.
- Bring-Forward Rule: Cap increased to $360,000 over three financial years.
These changes offer more opportunities to enhance your retirement savings. By understanding and utilising these increased contribution limits, you can save tax and improve your financial security in retirement.
The information provided should not be considered personal financial advice as it is intended to provide general advice only. The content has been prepared without taking into account your personal objectives, financial situations or needs. You should seek personal financial advice before making any financial or investment decisions.