Everything you need to know about the 1 July changes impacting your money
From 1 July 2024, several changes have been rolled out that will impact your super fund. Most notably, your employer will be paying 0.5% more super into your account under changes to the superannuation guarantee.
Employers pay more super
The superannuation guarantee is the percentage of your wage your employer is legally required to pay into your super account. From 1 July 2024, it increases to 11.5% from 11% - that likely means more super in your account this year.
The government has legislated the superannuation guarantee to settle at 12% in 2025, so after several successive rises you’ll see another 0.5% rise on 1 July 2025 and then we shouldn’t see any further increases to the guarantee for some time.
What does this mean for me?
Some employers pay super on top of salaries, and some include super in salaries.
If you receive super on top of your salary, this is basically a pay rise going into your super account. If super is included in your salary, the superannuation guarantee rise may mean you see a slight decrease in your take home pay this financial year.
Tax cuts
This year 13.6 million Australians will have more money in their pocket thanks to widespread tax cuts. It’s part of the government’s measures to provide some cost-of-living relief.
What does this mean for me?
Tax on annual earnings between $18,201 – $45,000 decreases from 19% to 16% and on earnings between $45,001 – $135,000 it decreases from 32.5% to 30%.
You can calculate just how much tax you’ll save over the financial year by using this TAX CUT CALCULATOR.
All Australian taxpayers are entitled to the tax-free threshold of $18,200 – so the first $18,200 you earn is tax free each year. If you earn, for example, $75,000 a year your income between $18,201 and $45,000 will then be taxed at 16% (down from 19%). The final $29,999 of your taxable income will be taxed at 30% (down from 32.5%). Because income tax works in this way, even higher income earners who earn over $135,000 a year will benefit from these tax cuts.
Tax cuts and putting more in your super
If for example, you earn $120,000 per year before tax, the tax cuts mean you’ll get an extra $103 each fortnight.
Could you use some of your take-home pay increase to grow your super, still receive a pay rise AND reduce your overall tax? Find out more here.
Concessional contribution cap increases
The concessional contribution cap will be bumped up from $27,500 to $30,000 from 1 July 2024.
What does this mean for me?
You can make contributions of up to $30,000 into your super account and you’ll be taxed on those contributions at the concessional rate of 15% rather than your normal income tax rate.
Concessional contributions work out as a tax effective way to save because for all income earners in Australia earning over $45,000 a year the income tax rate is more than 30%. The concessional contributions tax rate is only available to those earning less than $250,000 a year.
Want help with growing your super?
Contact a smartCoach today!
1300 COACH 1 (1300 262 241)
smartcoach@smartmonday.com.au
Want more information?
Join our smartCoaches for one of our new financial year update sessions on 30 or 31 July 2024, at no extra cost.
The events will cover:
changes to super
changes to tax
how you can take action