The new financial year always brings change, and this year, superannuation is on the agenda. From 1 July 2024, there are several super updates that you need to be aware of. Some were announced as part of the 2024-25 federal budget, while others are a result of legislation that had already been passed. We’ve detailed the important changes below and how you can use them to get the most out of your super.
While the focus of the recently announced federal budget was to provide cost-of-living relief to Australians, there were also several important updates regarding superannuation.
Parents of babies born or adopted on or after 1 July 2025 will now be paid superannuation on Government-funded paid parental leave. Payments will be made automatically on 1 July 2026.
This change is designed to reduce the financial impact on parents who take carer breaks. Modelling by the Super Members Council (SMC) shows that with this update, a mother of two will now be $12,500 to $14,500 better off when they retire.
In further good news for retirees, the budget included a 12-month extension of the current freeze on pension deeming rates until 30 June 2025. This will assist part pensions who rely on super pension income streams, as they are captured under the deeming rules.
Relief from the soaring cost of living is finally here and it has come in the form of personal income tax cuts. While it won’t affect your tax return for the 2023-24 financial year, from 1 July 2024 you will benefit from more money in your take-home pay (or a larger tax return next year if you’re self-employed). The table below shows the new income thresholds and tax rates for the 2024-25 financial year and beyond.
Previous income thresholds | Previous tax rate | New income thresholds | New tax rate |
$0 – $18,200 | Tax free | $0 – $18,200 | Tax free |
$18,201 – $45,000 | 19% | $18,201 – $45,000 | 16% |
$45,001 – $120,000 | 32.5% | $45,001 – $135,000 | 30% |
$120,001 – $180,000 | 37% | $135,001 – $190,000 | 37% |
Over $180,000 | 45% | Over $190,000 | 45% |
Depending on your income bracket, these tax cuts could increase your take-home pay by several thousand dollars each year. While you may see this as a golden opportunity to save for that new car or holiday you’ve been putting off, you should also consider using the additional money to fast-track your superannuation.
Sadly, only 28% of Australians are confident they’ll have enough to retire comfortably without cutting back. With the new wave of tax cuts officially here, now is a smart time to bump up your salary sacrifice and grow your superannuation balance.
Salary sacrificing involves sacrificing a portion of your income and contributing it to your superannuation fund. As well as boosting your super balance, salary sacrificing can further reduce your income tax. Any additional contributions of up to $30,000 you make are taxed at 15%, instead of your marginal tax rate.
In addition to the parental leave superannuation announced in the federal budget, other important superannuation changes came into effect at the beginning of the 2024-25 financial year.
From 1 July 2024, the superannuation guarantee rate has increased from 11 per cent to 11.5 per cent. That means your employer will now deposit a larger amount into your super account. The rate is also set to rise again to 12% on 1 July 2025.
When it comes to retirement savings, every bit counts – especially given it will compound over the course of your working life. But how much more are we talking about?
It depends on where your super is invested, the annual rate of returns, and fees along the way. To give you an idea, let’s look at two hypothetical examples projected by Australian Super. Assuming no career breaks, an 11.5% super rate compared with an 11% rate means:
While half a per cent increase might not seem large right now, these hypothetical examples highlight the significant difference this increase could make to your super balance by the time you retire.
With these changes, it’s important to track your contributions and check that your employer is paying your super correctly. You can do this by setting up an online member portal directly with your super fund. Or, you can use the Australian Tax Office online services through your myGov account.
From 1 July 2024, you can also make larger voluntary contributions to your super, both before tax and after tax:
These newly increased limits allow you to grow your super faster by making additional contributions that will compound over time.
Want to make the most of the recent changes and maximise your super? Get in touch with Poole Advisory today and speak with a qualified financial planner. We’ve spent the past two decades helping Aussies generate enough super for their ideal retirement.
Our expert team can help you navigate salary sacrificing and voluntary super contributions, as well as ensure your super is invested appropriately to keep you on track for your retirement goals. To get started, send us a message or book an appointment with one of our financial advisors.
This information contains general advice only, that is, advice which does not take into account your needs, objectives, or financial situation. You need to consider the appropriateness of that general advice in light of your personal circumstances before acting on the advice. You should obtain and consider the Product Disclosure Statement for any product discussed before making a decision to acquire that product. You should obtain financial or credit advice that addresses your specific needs and situation before making investment or borrowing decisions. Taxation information is based on our interpretation of the relevant laws as at 1 July 2018. While every care has been taken in the preparation of this information, Prosperitas Partners Pty Ltd does not guarantee the accuracy or completeness of the information. The case studies are hypothetical, for illustration purposes only and are not based on actual returns
Poole Advisory Pty Ltd ABN 15 642 040 604 is a Corporate Authorised Representative (No. 001282603) of Prosperitas Partners Pty Ltd ABN 30 662 654 453 AFSL 544 917
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From today, 1 July 2025, high superannuation balances may face a new tax under proposed legislation known as Division 296. While the measure is still making its way through Parliament, it’s expected to pass and for those with significant superannuation savings, now is the time to understand how it works and what it could mean for your retirement strategy.
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