The Australian Tax Office (ATO) confirmed this month that the superannuation thresholds for 2024 will increase. These adjustments equate to nearly a 10% rise in the allowable super contributions. The raised thresholds also benefit low-income earners by increasing the earnings limit for qualifying for the $500 co-contribution payment.

Superannuation contribution caps increase in increments of $2,500, tied to average weekly ordinary time earnings. Starting 1^st July, the concessional contribution cap will climb to $30,000 per individual, up from the current limit of $27,500.

Concessional contributions encompass contributions eligible for tax concessions, this is typically due to them being tax deductible. It includes voluntary personal contributions with claimed tax deductions and extends to salary-sacrificed arrangements where pre-tax income is directed to superannuation.

Compulsory employer super guarantee payments of 11% are also considered concessional contributions, rising to 11.5% on the 1^st July. This increase will also impact the carry-forward provisions, allowing individuals to utilise unused concessional contribution caps from the previous five years. To qualify for the carry-forward provisions, your total superannuation balance must be under $500,000 at 30 June of the previous financial year and other eligibility criteria such as age and work status must be met for those over 67.

From 1 July, under the carry-forward rules, individuals can utilise the new concessional cap of $30,000 along with three years of $27,500 and one year at $25,000, totaling $137,500 (excluding previously used amounts).

Concessional contributions incur a 15% contributions tax, doubling to 30% if adjusted taxable income exceeds $250,000 under “Division 293 tax.” This tax is typically deducted from the super fund as per the member’s instructions.

The non-concessional contribution cap will increase to $120,000 from 1 July, up from the current $110,000. To be eligible to make non-concessional contributions, your total super balance must be less than $1.9 million. Non-concessional contributions are those without tax deductions claimed and are not subject to contributions tax, meaning the full amount contributed is invested. If your total super balance is under $1.9 million, there is an opportunity to bring-forward contribution caps as detailed below:

Total Super Balance (at 30 June 2024)	Bring Forward Rules
Under $1.66 million	$360,000
$1.66 to less than $1.78 million	$240,000
$1.78 to less than $1.9 million	$120,000
$1.9 million and above	No bring forward

Should you require further expert advice in relation to super contributions and your obligations as an employer we encourage you to engage with an advisor.