Your compulsory Superannuation Guarantee payment will rise from 11% to 11.5% of earnings and Stage 3 tax cuts will kick in from next week.
Let's take a look at the details.
Superannuation changes starting next Monday
The Superannuation Guarantee ascends again from 1 July from 11% of earnings to 11.5% of earnings.
This is the payment made by your employer directly into your superannuation fund.
Say your salary is $100,000 plus superannuation. In FY24, you will have received $11,000 via the Superannuation Guarantee. In FY25, you will receive an extra $500 with your payment rising to $11,500.
Another superannuation change coming into effect next week is an increase in the personal concessional contributions cap from $27,500 to $30,000 for FY25. More about this later.
What about those tax cuts?
Every taxpayer will receive a tax cut from 1 July under the amended Stage 3 tax cuts.
Here are a few examples of how the tax cuts will affect wage earners.
Example 1. A worker earning $55,000 per year will save $1,054 per year in tax.
Example 2. A worker earning $80,000 per year will save $1,679 per year in tax.
Example 3. A worker earning $140,000 per year will save $3,729 per year in tax.
Here are the individual tax rate tables for FY24 and FY25. Use the following details to work out the exact tax savings you will receive based on your specific salary.
Resident tax rates FY25
| Taxable income | Tax on this income |
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 16 cents for each $1 over $18,200 |
| $45,001 – $135,000 | $4,288 plus 30 cents for each $1 over $45,000 |
| $135,001 – $190,000 | $31,288 plus 37 cents for each $1 over $135,000 |
| $190,001 and over | $51,638 plus 45 cents for each $1 over $190,000 |
Resident tax rates FY24
| Taxable income | Tax on this income |
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 19 cents for each $1 over $18,200 |
| $45,001 – $120,000 | $5,092 plus 32.5 cents for each $1 over $45,000 |
| $120,001 – $180,000 | $29,467 plus 37 cents for each $1 over $120,000 |
| $180,001 and over | $51,667 plus 45 cents for each $1 over $180,000 |
One week left to add extra funds to superannuation
There is only one week left to make personal contributions to your superannuation (and pick up the substantial tax concession that comes with it) before FY24 ends.
Personal superannuation contributions (up to the cap of $27,500 for FY24) are taxed at just 15%. This is far lower than most workers' marginal tax rates.
Personal contributions include the compulsory superannuation guarantee paid by your employer, any salary sacrificing you have arranged, and any extra money you choose to add yourself before 30 June.
Here's how the tax concession works.
Say you contribute $8,000 of post-tax earnings into superannuation. Your super fund will pay the 15% tax on your behalf. That will leave $6,800 to be invested in accordance with your selected strategy.
When you fill in your tax return, you will claim an $8,000 tax deduction, effectively cancelling out the original tax you paid on the $8,000.
Findex tax advisory partner Alex Duonis explains the benefit:
A high earning taxpayer may obtain a tax deduction at a rate of up to 47.5% in respect of such super contributions but may only pay contributions tax at the fund level of 15%, thus generating a potential immediate tax arbitrage benefit of 32.5%.
Make sure you check out all the rules relating to personal concessional superannuation contributions before making any decisions.
After depositing your funds, you must fill in a Notice of Intent to Claim or Vary a Deduction for Personal Super Contributions form and send it to your superannuation fund.
