This guide is prepared by TFW See & Lee
Superannuation is money you as the employer pay eligible workers to provide for their retirement. Super guarantee (SG) is the minimum legislated amount you must pay to avoid the super guarantee charge.
ACTION POINTS NOW:
- Communicate changes to employees of SG increase and workers who are now eligible from 1 July 2022
- Download and fill out the Standard Choice Super Form and/or Stapled Fund Details.
Superannuation Guarantee payment rate increases
On 1 July 2022, the SG rate is scheduled to increase from 10% p.a. to 10.5% p.a. of ordinary-time earnings.
The past, current and future proposed SG increases are shown in the below table:
| Period | Super guarantee (%) |
| 1 July 2020 – 30 June 2021 | 9.50 |
| 1 July 2021 – 30 June 2022 | 10.00 |
| 1 July 2022 – 30 June 2023 | 10.50 |
| 1 July 2023 – 30 June 2024 | 11.00 |
| 1 July 2024 – 30 June 2025 | 11.50 |
| 1 July 2025 – 30 June 2026 and onwards | 12.00 |
Source: ATO
Removal of the $450 per month income threshold for super contributions
Legislation will come into effect on 1 July 2022 that removes the $450 per month income threshold that employees currently need to earn to be paid the superannuation guarantee by their employer.
This also means, from 1 July 2022, employers must pay SG on payments they make to an employee aged under 18 years if they work for the employer for more than 30 hours in a week, regardless of how much they are paid.
Removing the work test for people aged 67 to 75
From 1 July 2022, the work test for personal (non-concessional) and salary sacrifice contributions to super for those aged 67 to 75 will be removed. Existing annual concessional and non-concessional caps will continue to apply, although the change will allow people under age 75 to use the non-concessional bring-forward rule (which currently ceases at age 67).
General Super Information Update
Concessional contributions cap
Concessional contributions include:
– employer contributions (including contributions made under a salary sacrifice arrangement)
– personal contributions claimed as a tax deduction.
If you have more than one fund, all concessional contributions made to all of your funds are added together and counted towards your concessional contributions cap (CCC).
| Income year | Your age at this date | Your CCC |
| 2022–23 | All ages | $27,500 |
| 2021–22 | All ages | $27,500 |
| 2020–21 | All ages | $25,000 |
Source: ATO
Excess concessional contributions are the amount of concessional contributions you make over your cap in a financial year. From 2013–14 onwards the excess contributions are included as taxable income and taxed at the marginal tax rate. Also, you are liable for an excess concessional contributions charge.
Individuals who make contributions from 1 July 2021 that exceed their cap, will no longer be liable to pay the excess concessional contributions charge.
Unused concessional cap carry forward
From 1 July 2018 if you have a total superannuation balance of less than $500,000 on 30 June of the previous financial year, you may be entitled to contribute more than the general concessional contributions cap and make additional concessional contributions for any unused amounts.
The first year you will be entitled to carry forward unused amounts is the 2019–20 financial year. Unused amounts are available for a maximum of five years, after which they will expire.
Non-concessional contributions cap
Non-concessional contributions include personal contributions for which you do not claim an income tax deduction. If you have more than one fund, all non-concessional contributions made to all of your funds are counted together towards the non-concessional contributions cap.
| Income year | Amount of cap |
| 2022–23 | $110,000** |
| 2021–22 | $110,000** |
| 2020–21 | $100,000** |
Source: ATO
** The non-concessional cap for an income year is a multiple of the concessional contributions cap.
From the 2020-21 financial year if you are under 67 years old, you may be able to make non-concessional contributions of up to three times the annual non-concessional contributions cap in a single year. This is known as the ‘bring-forward’ option.
Note:
The total superannuation balance (TSB) cap is $1.6 million between 1 July 2017 and 30 June 2021 and has increased to $1.7 million from 1 July 2021. Your TSB is a way to value your superannuation interests in all your super funds. It is calculated on a given date, usually 30 June (the end of the financial year).
Sources: ATO, Tax Institute
DISCLAIMER
The enclosed is prepared as general information only. The contents of this tax update does not constitute specific advice. Readers are encouraged to consult their tax adviser for advice on specific matters.