The Australian Taxation Office (ATO) recently released superannuation rate and threshold updates for the 2018/2019 financial year. Let’s discuss the key super rates and thresholds that are applicable to contributions and benefits, Super Guarantee (SG), and co-contributions.
Concessional Contributions Cap
Concessional contributions cap will continue to be at $25,000 for the 2018/19 financial year. Concessional contributions are before-tax income payments to your super made by you or your employer. They also include personal contributions claimed as a tax deduction.
Non-Concessional Contributions Cap
Non-concessional contributions cap will stay at $100,000 for the 2018/19 financial year. Non-Concessional Contributions are after-tax income payments made by you or your spouse to your super. They are also called personal or after-tax voluntary contributions. Individuals who have super worth over $1.6 million will not be qualified to make non-concessional contributions.
The Superannuation Guarantee (SG) rate stays at 9.50 per cent along with the highest super contribution base rising to $54,030 per quarter. Superannuation Guarantee contributions are the obligatory payments that are made by employers to their employees’ super on their behalf. The majority of Australian employees are eligible for SG contributions from their employer.
The highest superannuation co-contribution privilege will stay at $500 for the 2018/19 financial year. The lower income threshold limit for full co-contribution entitlement has risen to $37,697 and the higher income limit has also increased to $52,697. The superannuation co-contribution is intended to assist low-income wage earners to invest in their retirement. The government will make a co-contribution of up to $500 for eligible individuals who make personal contributions to their super.
Any individual who was born 30 June 1962 or earlier complies with the preservation age for 2018/2019. Superannuation is kept until retirement age and some requirements for gaining access to super depend on an individual getting to their preservation age.
Superannuation Benefits Cap
The low rate cap budget for superannuation benefits will increase to $205,000 this financial year. The low rate cap is the amount that an individual can withdraw tax-free over their lifetime, as long as they have reached their preservation age but have not turned 60 years old. Withdrawing from your super will become completely tax-free once you turn 60. However, there are other eligibility criteria that may apply for super benefit withdrawals.
Capital Gains Tax (CGT) Cap Amount
The capital gains tax limit has risen to $1,480,000 for 2018/19. The CGT limit is the lifelong super contribution limit for earnings from the sale of eligible small business assets.
For a complete list of superannuation rate and threshold updates, click here to go to the ATO’s website.
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