Super contribution caps will increase on July 1
By Luke Kidd
The amount that superannuation account holders can contribute will increase from the 1st of July 2024. Both the concessional contribution (pre-tax) and non-concessional contribution (post-tax) caps increase automatically with the wages index (AWOTE) which rose 4.5% over the 12 months to November 2023 [1].
From the 1st of July 2024, The concessional contribution cap will increase from $27,500 to $30,000 per financial year. This will allow taxpayers to increase their salary sacrifice contributions or to increase their personal deductible contributions to super. The re-vamped stage 3 tax cuts will come into effect at the same time. So, you may have more disposable income to contribute more to super. Members making catch-up concessional contributions in the future may also have increased levels of unused contributions in the future [2].
The non-concessional contribution cap is based on 4 times the concessional contribution cap, so it too will increase from $110,000 to $120,000 from the 1st of July 2024. The 3-year bring forward amount will also increase from $330,000 to $360,000. Post-tax contributions are often used after the receipt of a windfall or on the sale of an asset such as an investment property to significantly top-up the savings reserved for retirement. A higher contribution cap will provide more flexibility for these strategies going forward.
Making super contributions is subject to a number of other rules and limitations, so it’s important to seek advice in the first instance before making a contribution to super. Speak with us today to better understand how these contribution cap increases can benefit you.
References
Luke Kidd in an authorised representative of Alliance Wealth Pty Ltd. (AR: 001242685)