As we begin the new financial year, many Australians are finding they have plenty of financial upkeep to do.
Here we share some changes you should be aware of, as well as a few tips for staying on top of your finances at this time of year.
The super contribution caps have increased
The super contribution caps have increased on 1 July this year, meaning that Australians will have more scope to boost their retirement savings by making extra contributions. The annual cap for concessional contributions will go up from $27,500 to $30,000, while the cap for making non-concessional contributions will increase from $110,000 to $120,000.
Concessional contributions include the compulsory super payments made by employers, contributions made as part of salary sacrifice arrangements, and voluntary contributions that are claimed as tax deductions. They are generally taxed at 15%, which is lower than the marginal tax rates that apply on most incomes.
If you’re thinking about putting some of your take-home pay or savings into your super and claiming this as a tax deduction, just remember to submit a Notice of Intent form to your super fund. This should be done before you complete your tax return, before 30 June of the following financial year, or before you move money out of the super fund (whichever comes first).
In addition, if you haven’t maxed out your concessional contribution caps over the previous five years, you might be able to carry them forward to increase your cap this year. To be eligible to do this, your total super balance will need to be less than $500,000 at 30 June of the previous financial year.
Other super news
Also on 1 July, the minimum amount of super that employers have to pay their workers (known as the Superannuation Guarantee rate) increased from 11% of employees’ ordinary time earnings to 11.5%. These increases are scheduled to continue until the Superannuation Guarantee rate reaches 12% on 1 July 2025.
As for the general transfer balance cap, which is the total amount of super you can transfer to a tax-free retirement phase account, this will remain unchanged at $1.9 million. This figure is periodically indexed in line with inflation, and the December quarter didn’t return a CPI high enough to justify raising it by the usual $100,000 increment.
Keep in mind that your personal transfer balance cap may be less than the general transfer balance cap. You can find out your personal cap through the ATO portal within myGov.
Super to be paid on government-funded paid parental leave
Superannuation will be paid on government-funded paid parental leave (PPL) for parents of babies born or adopted on or after 1 July 2025. Eligible parents will receive an additional payment based on the superannuation guarantee (12% of their PPL payments), as a contribution to their superannuation fund.
Payments will be made annually to individuals’ superannuation funds from 1 July 2026.