From 1 July 2024, both concessional and non-concessional superannuation contributions caps will increase after the Australian Bureau of Statistics reported an increase in Average Weekly Ordinary Time Earnings (AWOTE) in the year to November 2023. The change was announced yesterday which has triggered a change in the contribution caps.
| Cap Type | Current | From 1 July 2024 |
| Concessional Contribution Cap | $27,500 | $30,000 |
| Non-Concessional Contribution Cap | $110,000 | $120,000 |
As a result of the cap increases (it is the first increase in three years!), the three-year bring forward limits will also increase from $330,000 to $360,000 for non-concessional contributions made from 1 July 2024.
You can carry-forward unused contribution cap amounts
There may be an opportunity to make additional concessional contributions for those members whose superannuation balances are less than $500,000 at 30 June of the previous financial year provided there are unused concessional contribution cap amounts available – from up to five previous years (but not prior to 2018-2019).
The oldest unused cap is carried forward first and any unused cap amounts are available for five years thereafter.
Put simply, this measure allows for members with balances under $500,000 to boost their superannuation balances by contributing available funds which exceed the standard annual concessional contribution cap.
Consequently, the concessional contributions that relate to the unusued cap available from a prior financial year can be claimed as a tax deduction in personal income tax returns at marginal rates (noting that concessional contributions are taxed at 15% on the way into a superannuation fund).
If you are thinking about contributing to superannuation and wish to understand the taxation implications of doing so – we recommend that you reach out to your ESV Engagement Partner or Client Manager to discuss the contribution cap rules in further detail.
With only four months until the end of the financial year, now is an opportune time to discuss how contributing to superannuation can impact both your current and future tax position whilst considering your overall group tax position and business goals.
Should you have any questions about how these changes will impact you, please reach out to your Engagement Partner.
