Superannuation Update
Superannuation Guarantee (SG)
For the 2022/23 tax year, the Superannuation Guarantee is increasing to 10.5% up from 10% in 2021/22.
The important thing to ensure, as an employee, is that the increase in SG does not push you into making excess concessional contributions if your employer is not capping your salary.
Concessional Contributions
Concessional contributions include:
• employer contributions (including contributions made under a salary sacrifice arrangement)
• personal contributions claimed as a tax deduction
The 2022/23 cap for concessional contributions remains at $27,500 which is the same as last year.
Personal superannuation contributions claimed as a tax deduction
Personal contributions (made from after-tax money) can be claimed as a tax deduction which can reduce the amount of tax you pay on your income.
Before making the contributions, it is important to check that you will not exceed your concessional contributions cap of $27,500 for 2022/23 by making such a contribution ie consider how much your employer has paid into your super fund for the year before making the contribution.
If you have exceeded your concessional contributions cap, there are opportunities to use your carry forward unused concessional contributions cap. If you have a Total Super Balance of less than $500,000 on 30 June of the previous financial year, you can utilise any unused amount of your cap for up to five years to make a carry-forward contribution. You can check your MyGov account for the balance of your unused concessional contributions cap.
How to claim a tax deduction
- Make the contribution to your Superannuation Fund – ensuring you are not exceeding the concessional contributions cap or your carry forward unused concessional contributions cap.
- Complete the Notice of intent to claim or vary a deduction for personal super contributions | Australian Taxation Office (ato.gov.au) and send it to your Superannuation Fund.
- Receive a letter of acknowledgement from your Superannuation fund of the amount you want to claim.
- Submit your tax return including the amount you want to claim as a tax deduction.
Non-Concessional Contributions
The non-concessional contributions cap remains at $110,000 for the 2022/23 tax year.
The bring forward rules continue to be available which means that you may be able to contribute up to three times the annual general non-concessional cap in that financial year. From 1 July 2022, the age limit for using these arrangements increases to age 75, allowing people in their early 70s to commence a bring-forward arrangement. From 1 July 2022 onwards, if you’re aged less than 75, you also no longer need to meet the work test (or work test exemption) for your super fund to be permitted to accept your non-concessional contributions. So, even if you’re not working you will be able to use the bring-forward rules.
Please note that you are not eligible to make any non-concessional contributions if your Total Super Balance is $1.7 million or greater.
Please contact Trudi Feehan on feehant@tax.uk.com if you need any assistance.