New super caps and thresholds

As from 1 July 2024, the following contributions caps will apply:

  • Concessional contributions cap is increasing from $27,500 to $30,000.
  • Non-concessional contributions cap is increasing from $110,000 to $120,000.
  • Members triggering the 3-year bring forward arrangement may be allowed to make non-concessional contributions of up to $360,000 over a 3-year period. The previous limit was $330,000.

Major superannuation changes affecting employers as from 1 July 2024 are:

  • Super Guarantee increasing from 11% to 11.5% as from 1 July 2024 – While most payroll software would reflect this automatically, it is highly recommended to review your payroll software settings as the Government will be actively pursuing any unpaid super guarantee.
  • The maximum super contributions base is also increasing from $62,270 per quarter to $65,070 per quarter from 1 July 2024.

Budget announcements

It was announced that as from 1 July 2025, superannuation will be paid on government-funded Paid Parental Leave (PPL). This is not yet law, but the current plan is for this measure to be administered by the ATO. It aims to provide additional support for small business employers and approximately 180,000 parents each year are expected to benefit from this change.

Previous announcements

While the spotlight was not on superannuation during the May 2025 Federal Budget, there were previous announcements worth noting:

  • Payday Super – From 1 July 2026, employers will be required to pay their employees’ super at the same time salaries and wages are paid.
  • Division 296 Tax (Super more than $3m)From 1 July 2025, a new additional tax of up to 15% may apply to individuals having more than $3m in super. This Division 296 is still just a proposed law but under the current mechanism proposed, additional tax will be levied:
  1. at a rate of 15%; and
  2. based on a proportion that is determined on an individual’s super balance exceeding $3m; and
  3. a specific definition of earnings under the draft legislation.

While the calculation itself is not overly complex, there have been numerous debates about the current definition of earnings as it may include both realised and unrealised gains. The $3m cap has also been criticised as this threshold is not currently expected to be indexed.

Many individuals with super around the $3m cap are already considering taking actions to reduce their superannuation balance. While this may be beneficial for some, it is worth noting that this may not be suited for everyone. The current draft legislation may still change and importantly, some financial analysis may help make a more informed decision.

Year-end planning and important considerations

As the end of the financial year is fast approaching, the following considerations are often essential:

Members in pension phase

Members in pension phase are required to withdraw their minimum pensions. This is based on your age and the total superannuation fund balance at the end of the previous financial year. Failure to meet the minimum pension requirement may lead to an individual’s balance being converted back to accumulation phase. The income derived from a fund in accumulation phase is taxed at 15% while the income derived from a fund in pension phase does not get taxed.

In the wake of Covid-19, the Government previously reduced the minimum pension requirement by 50%. Please note that this reduction has not been extended for the 2024 financial year and onwards.

Contributions cap

Many individuals attempt to maximise their contributions cap prior to the end of the financial year. When calculating the amount of contributions cap remaining, it is worth noting that:

  1. Contributions caps apply individually, not on a fund basis. A member having three different superannuation accounts will only have a $27,500 concessional cap and a $110,000 non-concessional cap prior to 30 June 2024.
  2. Contributions are accounted for when received. A cash contribution paid prior to 30 June but received by the fund after 30 June may not qualify as a contribution in the year you intended to. Contributions should be made well ahead of the 30 June deadline.
  3. Superannuation Fund payments made on behalf of your superfund, such as members paying for tax bills using their own funds, may also count towards your contributions cap. As a rule of thumb, your superfund should be considered as a separate entity and pay for its own expenses.

Carry forward unused concessional contributions

If an individual has unused concessional cap amounts from previous years, the individual may be able to carry them forward to increase contributions cap in later years. The general eligibility requirements are for the individual to have less than $500,000 in super and have unused concessional cap amounts from up to 5 previous years.

Any super law considerations or comments outlined above are general statements only, based on an interpretation of the current super laws, and do not constitute legal advice.

Co-authored by Timothy Wong, Manager Business Advisory Melbourne