Superannuation Changes from July 2024: A Complete Guide to the New Limits

Effective from the 1st of July 2024, a number of important changes to Australia's superannuation limits have taken place. Staying on top of these updates is crucial for planning your contributions and ensuring you can manage your retirement savings more effectively.

This guide will cover the key changes to help you plan for the 2025 financial year.

1. Superannuation Guarantee (SG) Rate Increase

The Superannuation Guarantee (SG) is the compulsory amount your employer must contribute to your super fund. On the 1st of July 2024, the SG rate increased from the previous rate of 11% to the new rate of 11.5%.

This is part of a legislated, progressive increase that will eventually see the rate reach 12%.

What this means for you: If you earn $120,000 per year, your employer will contribute $13,800 to your super in FY25, an increase from $13,200 in FY24. If you have an existing salary sacrifice arrangement, you may need to review it to account for this change.

2. Maximum Super Contribution Base Increase

The SG rate is only applied up to a certain limit, known as the maximum super contribution base. If you earn more than this quarterly limit, your employer is not required to pay SG on the excess amount.

From the 1st of July 2024, this base increased to $65,070 per quarter. While this may not affect those with a stable income below the cap, it's an important figure for high or variable income earners to be aware of.

3. Concessional Contribution Cap Increase

Concessional contributions are pre-tax contributions, such as employer SG payments, salary sacrifice, and personal deductible contributions. There is a limit, or "cap," on how much you can contribute this way each year. You can read more about it on the ATO website.

As of the 1st of July 2024, this cap increased from $27,500 to $30,000. This means an extra $2,500 can be contributed each year in a tax-effective way.

4. Carry-Forward Concessional Contributions

You might be able to contribute even more than the general cap. If your total super balance was less than $500,000 on the 30th of June of the previous financial year, you can use any unused concessional cap amounts from up to five previous financial years.

This is known as the "carry-forward" rule. For example, in FY25, an eligible person who has made no super contributions since FY20 could potentially make a total concessional contribution of $162,500. This strategy can be incredibly useful for those with a one-off high-income event, like selling an investment property. You can check your unused cap amounts through your MyGov ATO service.

Bonus Tip: Know Your Effective Tax-Free Threshold. Due to the revised Stage 3 tax cuts, the effective tax-free threshold for FY25 increased to $22,575. If you are using concessional contributions to reduce your taxable income, make sure you don't aim for the old headline threshold of $18,200, as you could be over-contributing unnecessarily.

5. Non-Concessional Contribution (NCC) Cap Increase

Non-concessional contributions (NCCs) are made with after-tax money, like savings from your bank account. You don't get taxed again when this money enters your super fund. The annual cap for these contributions has also increased.

• The general NCC cap is always four times the concessional cap.
• From the 1st of July 2024, this cap increased from $110,000 to $120,000.
• To be eligible to make NCCs in FY25, your total superannuation balance must have been less than $1.9 million on the 30th of June 2024.

6. The Bring-Forward Rule for NCCs

Similar to the carry-forward rule, there is a "bring-forward" rule that allows you to exceed the general NCC cap. However, as the ATO explains, it works in the opposite direction.

Under this rule, you can use your NCC caps from up to two future years, effectively tripling your contribution limit in the current financial year.

• In FY25, an eligible person could make a one-off contribution of $360,000.
• If you use this rule, you cannot make any further NCCs for the next two financial years.

This rule is useful for those who want to make a large, one-off contribution to their super, but the eligibility criteria can be complex.

7. Government Co-Contribution Thresholds Increase

The government co-contribution is a scheme where the government contributes to your super if you meet certain criteria. In FY25, the income thresholds increased, meaning more people could benefit.

• To get the maximum $500 benefit: You needed to make an after-tax contribution of at least $1,000, and your income must have been under $45,400.
• The benefit gradually decreased and cut out completely once your income reached $60,400.

You can use the super co-contribution calculator on the ATO's website to estimate your entitlement.