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SUPERANNUATION
From 1 July 2024
EMPLOYERS - SUPERANNUATION GUARANTEE
Employers usually contribute
11.5% of ordinary time earnings to your
superannuation fund and then claim a tax deduction.
Employees must be over 18 years old ((70 year old age limit from 1 July 2013, from 1 July 2016 < 75 years old)) and you pay $450 or more in salary or wages in a month.
Employees under 18 years old must also work at least 30 hours per week. Employers must make these payments on 28th day after each quarter or pay a superannuation guarantee charge which includes the 11.50% superannuation plus interest plus an ATO administration fee.
Ordinary time earnings:
Includes - ordinary hours of work, over-award payments, certain bonuses, commissions, shift-loading and certain
allowances.
Excludes - Unused sick leave, unused annual leave, unused long service leave, overtime payments or lump sum
payments relating to overtime and specific loadings.
These are called concessional contributions.
The governments has announced that a low income superannuation support will be provided via a payment of up to $500 a year, meaning no effective tax is paid on compulsory super contributions for employees earning up to $37,000 per year.
Superannuation Guarantee age limit of 70 years old will be removed.
SALARY AND WAGES EMPLOYEES POST TAXED CONCESSIONAL CONTRIBUTIONS
Removal of the < 10% of total assessable income test.
This means that salary and wage employees may contribute up to $27,500 limit in post taxed dollars and receive a tax deduction.
Previously you were only
able to salary package extra superannuation concessional
contributions or make a non-concessional contribution with post
taxed income.
CONCESSIONAL CONTRIBUTIONS ANNUAL CAP
30 June
2024
If you were aged under 50
then concessional contribution cap is $27,500.
Your superannuation fund pays a 15% contributions tax to the ATO for all concessional contributions. If your income is > $250,000 you will pay 30% contributions tax.
From 1 July 2024
CONCESSIONAL CONTRIBUTIONS ANNUAL CAP
$27,500
Concessional contribution cap is $27,500
for all individuals.
Some individuals with a superannuation balance of < $500,000 may make additional pre-tax contributions where they have not reached their cap in the previous 5 years (from 1 July 2017).
Your superannuation fund pays a 15% contributions tax to the ATO for all concessional contributions. If your income is > $250,000 you will pay 30% contributions tax.
The governments has announced that a low income superannuation support will be provided via a payment of up to $500 a year, meaning no effective tax is paid on compulsory super contributions for workers earning up to $37,000 per year.
EXCESS CONCESSIONAL CONTRIBUTIONS
If you exceed the concessional contributions cap, any excess concessional contributions will be included in your assessable income and taxed at your marginal tax rate, rather than the excess concessional contribution tax rate of 31.5%.
To reduce your tax liability, the ATO will apply a 15% tax offset to account for the contributions tax that has already been paid by your super fund provider.
You may elect to withdraw up to 85% of your excess concessional contributions from your superannuation fund to help you pay your income tax assessment.
EXCESS CONCESSIONAL CONTRIBUTION CHARGE
This charge is payable on the increase in your tax liability for the year you have excess concessional contributions.
The relevant charge period is calculated from the start of the income year in which the excess concessional contributions were made. It ends the day before the tax is due to be paid under your first income tax assessment for the year that includes the excess concessional contributions.
The ECC charge rates are updated quarterly
NON CONCESSIONAL CONTRIBUTIONS
30 June 2024
These are non tax deductible contributions. There is no contributions tax paid to the ATO.
LIMITS
UNDER 65
$110,000 per year or $330,000 over 3 years.
OVER 65
$110,000 per year and must satisfy work test.
OVER 74
Cannot contribute.
From 1 July 2023
Transition to Retirement:
The tax exemption on earnings of assets supporting transition to retirement income streams will be removed.
Non
Concessional Contributions Cap (NCC)
• a reduced annual
non-concessional contributions cap (NCC).
• eligibility changes referring to a client’s total
super balance and general transfer balance cap
• government co-contribution linked to the annual NCC
cap and/or total super balance.
The annual NCC cap reduces to $110,000
and the maximum bring forward cap is lowered to $330,000
the
previous financial year to be eligible to make NCCs in the
relevant financial year.
This
criterion is to be met in addition to the existing age and work
test requirements.
From 1 July 2017
For the 2017-18 financial year,
the general transfer balance cap is $1.9 million.
Clients under 65 are eligible to make NCCs at any time.
Clients who are 65 years of age or over at the time of
contribution are eligible to make NCCs if they are not yet 75
and have met the work test.
2 Contribution can be made by member and must be
received by trustee no later than 28 days after the end of the
month that the member turns 75.
1 Indexed in $110,000 increments in
line with the Consumer Price Index (CPI).
YOUR SUPERANNUATION FUND
Your superannuation balance must be < $1.m on 30 June 2024.
You must not exceed your non-concessional contributions cap in the 30 June 2024 financial year.
Your superannuation co-contribution must appear in your superannuation fund's members statement as personal contributions Label B.
When your superannuation fund actually receives the superannuation co-contribution from the ATO it is recorded in the co-contribution part Label M of your members statement in your superannuation fund's tax return.
The ATO currently makes these superannuation co-contribution payments on the 2nd Friday of each month.
S
SUPERANNUATION INCOME STREAM AND ALLOCATED PENSIONS
TAX FREE ALLOCATED
PENSIONS
Superannuation funds do not pay tax on the portion of its fund that
is part of an income stream or allocated pension.
SUPERANNUATION INCOME STREAM AND ALLOCATED PENSION
MINIMUM % TAX FREE PENSION
PAYMENTS
The minimum superannuation pension payments for the year
ended 30 June 2024:
AGE
55 - 64 4%
65 - 74 5%
75 – 79 6%
80 – 84 7%
85 – 90 9%
90 – 94
11%
> 95
14%
CONDITIONS OF RELEASE
SUPERANNUATION FUND'S TRUST DEED
Conditions of release are governed by the rules set out in the super fund’s trust deed.
RETIREMENT
< 65 Occurs when an arrangement under which they were gainfully
employed ceased and the member does not intend to be employed either
full or part time in the future. Working < 10 hours per week would
be acceptable.
ATTAINING THE AGE OF 65
May cash benefits at any time.
BENEFITS < $200
May cash at any time.
PERMANENT INCAPACITY
May cash at any time
TEMPORARY INCAPACITY
May only cash insurance or voluntary employer benefits.
SEVERE FINANCIAL HARDSHIP
Can not meet reasonable and immediate family living expenses.
Has been receiving government support for 26 weeks.
Restricted to $10,000 in 12 month period.
COMPASSIONATE GROUNDS
TEMPORARY RESIDENT VISA
i) You may access your superannuation if your temporary resident visa has expired or has been cancelled and you have left Australia
ii) You are not able to claim a DASP if you are a permanent resident of Australia or a citizen of Australia or New Zealand
TAX RATES
i) Taxable Component - 38%
ii) Tax-free Component - 0%
iii) Untaxed Element - 47%
iv) Working Holiday Makers - 65%
Maximum $540
A tax offset may apply if contributions are made on behalf of your spouse to a:
Complying super fund
Retirement savings account
You may be able to claim a 18% tax offset on super contributions of up to $3,000 you make on behalf of your non-working spouse or low-income-earning spouse.
ELIGIBILITY
You may be entitled to a maximum tax offset of up to $540 each year if:
You did not claim a tax deduction for the contributions.
Both of you were Australian residents when the contributions were made.
The contributions were made to a complying superannuation fund.
Spouse's
Assessable Income is the sum of the following amounts:
Taxable income
Adjusted fringe benefits
Net investment losses
Reportable super contributions
Must be < $13,800 this will increase to $40,000 for 30 June 2023.
Maximum rebate is the lesser of:
0 to $10,800 x 18%
$10,801 to $13,799 = ($3,000 - (Spouse's Income - $10,800)) x 18%
Disclaimer
The information provided in the above documents is not intended to
be, nor should it be construed as tax advice. Any specific
recommendation for a client can only be done after their individual
circumstances have been determined by David Douglas Accountants.
We have clients from the following locations:
Brisbane, Gold Coast, Sydney, Newcastle, Cairns, Canberra, Melbourne, Adelaide, Perth, Darwin.
Other:
Brisbane, Albion, New Farm, Teneriffe, Newstead, Windsor, Wilston, Bowen Hills, Wooloowin, Herston, Lutwyche, Hamilton, Eagle Farm, Gordon Park, Fortitude Valley, Clayfield, Ascot, Hendra.
Morayfield, Burpengary, Caboolture, Bellmere, Wamuran, Narangba, North Lakes, Mango Hill, Kallangur, Dakabin, Deception Bay, Bribie Island, Elimbah, Kippa-Ring.
We do tax returns for individuals, trusts, companies, partnerships, contractors, ABNs and sole traders.
Liability limited by a scheme approved under Professional
Standards legislation