Quick Tax Update – CHANGE TO SUPERANNAUTION CONTRIBUTION CAPS
The salary sacrificing or “concessional” cap for superannuation is to be increased to $30,000 for the 2014-15 year, up from the current amount of $25,000.
The cap is the limit on how much can be salary sacrificed into super in a financial year and includes the compulsory super paid by employers.
The non-concessional (after tax) cap will increase to $180,000 from July 1, up from the current amount of $150,000. The non-concessional cap is maintained at six times the concessional cap.
For those who meet certain age qualifications the cap has already been raised. Those aged 60 and over in the current financial year have a salary sacrifice cap of $35,000 and this higher cap will be expanded from the 2014-15 financial year to cover everyone over 50.
Salary sacrifice caps include the 9.25 per cent compulsory superannuation guarantee, which the government intends to increase, after a two-year pause at 9.25 per cent (for 2014-15 and 2015-16) after which it progressively increases to 12 per cent by 2021.
Excess contributions tax is levied on contributions in excess of the caps. Excess concessional contributions are automatically included by the Tax Office in an individual’s assessable income. Those who make excess concessional contributions are taxed on the contributions at their marginal income tax rate.
If you need more Tax Advice St Ives or would like to know more tax tips for the 2015 year please give us a call on 1300 627 829 or contact us below
