Strong Wages Growth Results in Superannuation Contribution Cap Increases

Superannuation contribution caps are set to increase for the first time in three years following the release of the latest Average Weekly Ordinary Time Earnings (AWOTE) index by the Australian Bureau of Statistics.

As a result, from 1 July 2024:

• The standard Concessional contribution cap will increase from $27,500 to $30,000.
• The Non-concessional contribution cap, which is expressed as 4 times the standard concessional contribution cap, will increase from $110,000 to $120,000.
• The maximum Non-concessional cap available, under the Non-concessional contribution bring-forward provisions, will increase from $330,000 to $360,000.
• The Total Superannuation Balance Thresholds, used to determine the maximum amount of bring-forward Non-concessional contributions available to an individual, will also be adjusted.

The Non-concessional contribution caps and thresholds are summarised in the table below:

In addition to the adjusted contribution caps and thresholds outlined above, there are a number of other thresholds that are also indexed in line with AWOTE, including

• the eligibility thresholds for the Superannuation Government Co-Contribution,
• the CGT Contribution cap (which applies following the sale of eligible small business assets),
• the Low-Rate Cap (which applies to the tax treatment of superannuation withdrawals),
• Redundancy tax-free thresholds, and
• The Superannuation Guarantee maximum contribution base.

The General Transfer Balance Cap, which is indexed according to movements in the Consumer Price Index (CPI), had already been confirmed as remaining set to $1.9 Million for the 2024-25 financial year.

The increases are good news however your personal circumstances need to be taken into consideration so speak to your advisor to find out what these changes mean for you.