Superannuation Rates and Thresholds

The following is brief overview of the current key rates and thresholds that apply in relation to superannuation.

Preservation age

• Generally, you must reach preservation age before you can access your super. Use the following table to work out your preservation age.

Super co-contribution

• The super co-contribution is a Federal Government initiative to assist eligible individuals to save for their retirement.
• If you are eligible and make personal non-concessional contributions, the government will match your contribution with a super co-contribution up to certain limits.

New Government supperannuation support for low income earners

• This overveiw looks at the new legislation that has been passed by the government that allows concessional contributions made from 1 july 2012 to attract the governments new low income supperannuation contribution (LISC).

Reduction of the Governemtn co-contribution

Coinciding with the commencement of LISC from july 1 2012, the Government co-contribution (relevant to non-concessional contributions) is expected to decrease.

Co-contribution income thresholds

The lower income threshold is indexed in line with AWOTE each income year. However, government proposals have led to the lower limit threshold being frozen for the 2010-11 and 2011-12 years.

Example benefit for contributions

How much you’ll receive depends on you income. For every dollar you contribute from your after-tax income, the Government will put in 50 cents, up to a maximum of $500. Use our contributions advisor calculator or the table below.

Superannuation guarantee (SG)

The superannuation guarantee requires employers to contribute a minimum of 9.5% of an eligible employee’s earnings (ordinary time earnings) to a complying super fund or retirement savings account (RSA). Your contributions need to be made at least every quarter.

Maximum super contribution base

• The maximum super contribution base is used to determine the maximum limit on any individual employee’s earnings base for each quarter of any financial year.
• Employers do not have to make SG contributions for earnings above this limit.

* Indexed in line with AWOTE each income year.

Contributions caps

Concessional contributions cap (CCC)

Concessional contributions include:

• employer contributions (including contributions made under a salary sacrifice arrangement)
• personal contributions claimed as a tax deduction by a self-employed person (that is, pre-tax income used).

Concessional contributions cap for people 50 years old or over

The concessional contribution cap.

• 49yrs of age on 30 June 2016 the cap is $35,000
• For all others the cap is $30,000

The Concessional contributions cap will be temporarily increased to $35,000 for the:

The temporary higher contributions include personal contributions for which you do not claim an income tax deduction.

Non-concessional contributions cap (NCCC)

Non-concessional contributions include:

• personal contributions for which you do not claim an income tax deduction (that is, after-tax income used).

* age on July 01.

Small business exclusion (CGT cap)

• Under the CGT cap, non-concessional super contributions from the sale of a small business will be excluded from the NCCC up to a lifetime limit amount. Small business sale proceeds above this lifetime limit will be included in the NCCC.

Untaxed plan cap amount

• The untaxed plan cap amount limits the concessional tax treatment of benefits that have not been subject to contributions tax in a super fund (such as some government funds).
• The untaxed plan cap amount applies to each super plan from which a person receives super lump sum member benefits.

* The untaxed plan cap amount is indexed in line with AWOTE, in increments of $5,000 (rounded).

Super lump sum tax table

* The application of the low rate threshold for super lump sum payments is capped at $195,000 (2016/17).
^ The untaxed plan cap is $1,415,000 (2016/17).

Payment levels from income streams (super)

• If you have commenced an allocated pension or annuity on or after 1 July 2007, a minimum amount is required to be paid to you each year.
• There is no maximum amount (excluding “Transition to Retirement” pensions), other than the prevailing balance of your account.

Super income stream tax tables

Taxed Fund

Tax-free component

The tax-free component of any income drawn is not assessable and not exempt income in all cases.

Taxable component

Medicare levy (2%) will apply if amounts are assessable.

Untaxed Fund

Tax-free component

The tax-free component of any income drawn is not assessable and not exempt income in all cases.

Taxable component

Medicare levy (2%) will apply if amounts are assessable.

Employment termination payments

An employment termination payment (ETP) is a payment made in consequence of the termination of employment. It can include:

• amounts for unused rostered days off
• amounts in lieu of notice
• a gratuity or ‘golden handshake’
• an employee’s invalidity payment (for permanent disability, other than compensation for personal injury)
• certain payments after the death of an employee.

ETPs do not include:

• a payment for unused annual leave or unused long service leave
• the tax-free part of a genuine redundancy payment or an early retirement scheme payment.

ETP cap amount

• The amount up to the ETP cap amount will be taxed at a concessional rate.
• The amount in excess of the ETP cap amount will be taxed at the top marginal rate.

ETP cap amount for termination payments:

* The ETP cap amount is indexed in line with AWOTE, in increments of $5,000 (rounded).

Transitional ETP cap amounts up to 30 June 2016

Transitional arrangements apply if you were entitled, as at 9 May 2006, to a payment made on the termination of employment under:

• a written contract
• an Australian or foreign law (or an instrument under such a law)
• a workplace agreement under the Workplace Relations Act 1996.

Employment termination payments made after 1 July 2007 (other than those made under the transitional arrangements) won’t be able to be contributed to or rolled over into super.

The taxable component of a transitional termination payment will be taxed at:

• no more than 15% up to the lower cap amount
• no more than 30% on the amount which exceeds the lower cap amount but does not exceed the upper cap amount
• the top marginal rate for amounts in excess of the upper cap amount.

ETP tax table