Tax Alert – Superannuation Guarantee Increase & Removal of the monthly $450 income threshold

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Superannuation Guarantee increase from 1 July 2022

The Australian Taxation Office (ATO) has recently reminded taxpayers of the scheduled increase to the superannuation guarantee (SG) percentage, while some superannuation limits remain the same.

From 1 July 2022, Australians will be contributing more into their superannuation fund as the SG percentage will increase from 10.0% to 10.5% per annum.
Employers must pay Superannuation Guarantee contributions into an eligible worker’s super account. As the transitional rates increase, the minimum contribution rate will rise from 10% to 10.5% on 1 July 2022, and it will continue to gradually increase up to 12.0 per cent by 1 July 2025.

Removing the monthly income threshold

The $450 monthly income threshold to receive employer contributions under the superannuation guarantee rules will be removed.
Note: From July 1, 2022, employers will need to pay superannuation guarantee (SG) contributions for low-income earners, being those that earn less than $450 per month.

Concessional contributions cap from 1 July 2022

Concessional contributions are contributions that are made into your super fund before tax, including through salary sacrifice arrangements, and are taxed at a rate of 15 per cent in the superannuation fund. The annual concessional contribution cap will remain at $27,500 from 1 July 2022.

Carry-forward concessional super contributions

Please note that since 1 July 2018, members can make carry-forward concessional super contributions if they have a total superannuation balance of less than $500,000. Members can access their unused concessional contributions caps on a rolling basis for five years. Amounts carried forward that have not been used after five years will expire.

The first year in which you can access unused concessional contributions is the income year ending 30 June 2020.

Non-concessional contributions cap from 1 July 2022

Non-concessional contributions are contributions that are made into your super fund after tax is paid. The annual non‑concessional contribution cap will also remain at $110,000 from 1 July 2022.