5 August 2024
The latest changes to superannuation came into effect on 1 July 2024, with another significant update on the cards for employers in 2026.
New superannuation rules are now in place, as part of the Government’s ongoing reforms to help increase retirement savings for Australians.
This includes a rise in the superannuation guarantee (SG) rate and increases to concessional and non-concessional contribution caps.
SG increase
From 1 July 2024, the SG rate increased from 11% to 11.5%. This means that employers are now required to contribute 11.5% of an employee's earnings into their super account.
The SG rate will increase by 0.5% again on 1 July 2025 bringing it to the legislated rate of 12%. Over your employees’ working years, this slight increase can have a positive impact on the amount of super they save and can spend in retirement. Some employees may have a higher percentage of super agreed by an award rate or employment agreement. If this is the case, you need to pay the higher amount.
If you need help calculating how much super to pay, you can use the Australian Taxation Office's (ATO) Super guarantee contributions calculator.
Increase in super contribution caps
An increase in both concessional and non-concessional contribution caps also took place on 1 July of this year.
Concessional contributions
Concessional contributions are pre-tax super contributions. They can include employer contributions, salary sacrifice arrangements, and personal contributions for which an employee may be able to claim a tax deduction.
For FY25, the concessional contribution cap has increased to $30,000, up from $27,500 in the last financial year. This increase allows individuals to contribute more pre-tax money to their superannuation, which may provide an opportunity to further reduce their taxable income while boosting their retirement savings.
Concessional contributions could be beneficial for employees in higher income brackets who are looking to maximise their tax-effective super contributions. Generally, making extra concessional contributions is tax effective if you earn more than $45,000 per year.
Non-concessional contributions
Non-concessional contributions are after-tax super contributions. These contributions are not taxed when they are added to a super account, as this money is taken from savings or income that’s already had tax paid on it.
The non-concessional contributions cap has increased to $120,000, up from $110,000 in the last financial year. Individuals who can afford to contribute more of their after-tax income to superannuation can use this as another way to help increase their retirement savings. Other conditions apply.
Exceeding contribution caps can lead to additional taxes and affect an employee’s super balance. By staying informed and proactive, employers can help employees manage their superannuation effectively.
More details on super contributions can be found on the Australian Taxation Office (ATO) website.
Increase in maximum super contribution base
Employers must pay a minimum amount of super each year, the SG rate. But there’s also a maximum limit, called the maximum super contribution base. This is important to take note of if you have any high-income earners on the payroll.
The maximum superannuation contribution base is $65,070 each quarter for the 2024–25 financial year. This means, if you have any employees who earn more than that in a given quarter, you can stop paying SG on what they earn above the limit until the next quarter ticks over.
A summary of 1 July 2024 changes:
| Rate/threshold | 2023/24 | 2024/25 |
|---|---|---|
| SG rate | 11% | 11.5% |
| Concessional contribution cap | $27,500 | $30,000 |
| Non-concessional contribution cap | $110,000 | $120,000 |
| Maximum super contributions base | $62,270 per quarter | $65,070 per quarter |
Payday super
While payday super is not yet legislated, it is proposed to start for employers on 1 July 2026. Under payday super, employers will be required to pay their employees’ super at the same time as their salary and wages.
Before it comes into effect, there’s an opportunity for businesses to prepare for any changes, including looking at the impacts on business cashflow of super being paid at the same time as the regular pay cycle.
The impact of super changes
These latest changes to super are ultimately designed to enhance the retirement savings landscape for more workers, especially as Australia’s ageing population continues to grow.
It’s also important for employers to review their current superannuation strategies, especially with payday super not far off.
As an employer, make sure you are paying the correct rates and are aware of the payment dates. You can stay on top of the latest super changes, including payday super, by visiting our Changes to superannuation webpage.
This may include general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision consider if the information is right for you and read the relevant Product Disclosure Statement, available at australiansuper.com/pds or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD.
AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.