Important Superannuation Update
As we enter the new financial year it is important to take note of several important superannuation changes and updates.
Superannuation Guarantee Rate
From 1 July 2014 the rate of superannuation guarantee required to be paid by employers is increasing as shown in the table below. Employers need to ensure that from 1 July 2014 they are calculating and paying superannuation using the higher SGC rate.
| SGC Rate | |
| 1 July 2013 – 30 June 2014 | 9.25% |
| 1 July 2014 onwards | 9.5% |
Superannuation Contribution Caps
From 1 July 2014 the superannuation contribution caps are being increased as shown in the table below.
Concessional Contributions Cap (which includes employer SGC, salary sacrifice and personal contributions for which a deduction has been claimed):
| Normal Cap | Temporary Cap | |
| 1 July 2013 – 30 June 2014 | $25,000 | $35,000 for those aged 59 or over on 30/6/13 |
| 1 July 2014 – 30 June 2015 | $30,000 | $35,000 for those aged 49 or over on 30/6/14 |
Non Concessional Contributions Cap (which includes after tax contributions and personal contributions for which no deduction has been claimed):
| Normal Cap | |
| 1 July 2013 – 30 June 2014 | $150,000 |
| 1 July 2014 – 30 June 2015 | $180,000 |
Please note that contributions are per person (not per employer) and are counted in the contribution cap when the amounts are received by the fund. Contributions in excess of the cap can either be withdrawn from the fund and taxed to the individual or will be subject to excess contributions tax.
If you are eligible to claim deductions for personal super contributions or have arrangements for salary sacrifice contributions, now is the time to make any last minute super contributions for 2013/14 and to review arrangements for the 2014/15 financial year.
Spouse super contribution tax offset
A tax offset may apply if contributions are made on behalf of your spouse. This tax offset applies to contributions made on behalf of non-working or low-income-earning spouses, whether married or de facto who has an adjusted assessable income of less than $13,800. You may be able to claim an 18% tax offset on super contributions of up to $3,000 you make on behalf of your spouse.
Super co-contribution
The government will contribute 50 cents for each $1 you contribute in non-concessional contributions, up to a maximum of $500 in co-contribution per year. To receive the maximum co-contribution, your total income1 must be no more $33,516 in 2013/2014. The super co-contribution progressively reduces for incomes over these amounts.
The table below outlines the phasing-out scale for the 2013/2014 financial year for incomes exceeding $33,516.
| Total Income | After tax contribution for maximum co-contribution | Maximum super co-contribution for 2013/14 |
| $33,516 | $1,000 | $500 |
| $38,516 |
$666 |
$333 |
| $43,516 | $334 | $167 |
| $48,516 | $0 | $0 |
1 Total income comprises assessable income plus reportable fringe benefits plus reportable employer super contributions less allowable business deductions
Superannuation Maximum Contribution Base
The maximum contribution base on which superannuation guarantee payments are required to be made are also being increased from 1 July 2014 as shown below. Income earned by employees in excess of the contributions cap during a quarter are not subject to SGC.
| Maximum Contribution Base | |
| 1 July 2013 – 30 June 2014 | $48,040 per quarter |
| 1 July 2014 – 30 June 2015 | $49,430 per quarter |
Division 293 Tax
Division 293 increases the amount of superannuation contributions tax payable by ‘very high’ income earners. Under the Division 293 rules individuals whose adjusted taxable income exceeds $300,000 p.a. are taxed an additional 15% on their concessional superannuation contributions as well as the normal superannuation contributions tax payable by the superannuation fund of 15%. For the purpose of this test adjusted taxable income is the sum of taxable income, concessional super contributions, adjusted fringe benefits, net investment (including rental) losses, target foreign income and tax free government pensions less any child support paid. Now is the time to discuss any tax planning opportunities that may be available, if you would like to discuss tax planning please contact our office.
To discuss how this may impact your circumstances please contact PPT on (03) 5331 3711.
DISCLAIMER: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
