Superannuation Legislation and Threshold Changes 2014
Wed 18th Jun, 2014
June is the month to prepare for the new financial year changes that will impact your business.
Below are changes we would like to draw your attention to:
- Current Superannuation rate is 9.25%. This rate ends on 30 June 2014
- The new rate, effective from 1st July, is 9.5%. This rate will remain in place until 30 June 2018.
- From 1 July 2018, the rate will increase annually by 0.50% per year from 1 July 2018 until 1 July 2022; when it reaches 12%.
The contribution cap has 2 parts:
- Non-concessional is $180,000 from 1 July 2014.
- Concessional general cap is $30,000 from 1 July 2014.
- Concessional general cap is $35,000 for those aged 49 years or over on 30 June 2014.
Superannuation - Option to withdraw excess contribution
For any excess non-concessional contributions made after 1 July 2013, the government will allow individuals to withdraw those excess contributions and associated earnings. If an individual chooses this option, no excess contributions tax will be payable and any related earnings will be taxed at the individual's marginal tax rate.
Individuals who leave their excess non-concessional contributions in their superannuation fund will continue to be taxed on these contributions at the top marginal tax rate.
Non-concessional contributions in excess of a person's cap are currently taxed at 46.5% (47% from 1 July 2014). The tax liability is currently levied on the individual. The individual must withdraw an amount from their superannuation fund equal, to the tax liability by providing, a release authority to their superannuation provider within 21 days.
2014 Tax Rates & Tax Free Threshold
The proposed increase in the tax free threshold will not proceed until the next financial year. From 1 July 2015, the tax free threshold will increase to $19,400.