General transfer balance cap to rise on 1 July 2025
The general transfer balance cap (TBC) will increase from $1.9 million to $2 million on 1 July 2025, in line with inflation.
Key points
The defined benefit income cap (DBIC) will also rise to $125,000 (up from $118,750) for the 2025–26 income year.
This adjustment will affect individuals with a personal TBC, as those who haven’t previously reached or exceeded their cap will receive a proportional increase based on their remaining cap space.
From 1 July 2025, anyone commencing a pension for the first time will have a personal TBC of $2 million.
ACT NOW: Employer Super Contributions for Year Ended 30 June 2025
Employers please note, if you intend to claim a tax deduction in 2024/25 for your employees’ June 2025 quarter super contributions, please ensure you make the payment by no later than 20 June 2025 to allow adequate time for the contributions to be processed through the superannuation clearing house and allocated to your employee’s super accounts.
This is also a timely reminder for clients making employer contributions to their own or their employees’ SMSFs using the ATO’s SBSCH clearing house service. Please check that the bank details of the SMSF are up to date and correctly recorded by the ATO, otherwise payments may be rejected, causing further delays to the receipt of funds into the SMSF.
Otherwise please ensure the June quarter contributions are made by mid-July to ensure you meet the due date deadline of 28 July 2025.
Super Guarantee (SG) base rate rise 1 July 2025
The SG base rate is set from 1 July which will increase from 11.5% to 12%.
The maximum super contributions base is decreasing from the current year’s $65,070 per quarter to $62,500 per quarter for 2025/26. This means that employers are not obligated to pay Super Guarantee contributions for an employee with quarterly earnings that exceed this limit, unless contractually required to do so.
Employers should review their employees’ contractual and award arrangements to ensure their strategy to the payment increase is in accordance with their legal obligations.
Please contact Allan Hall HR on 1300 916 764 or [email protected] for assistance reviewing or interpreting your current employment arrangements.
Please note that software providers will be making the adjustment to their systems but, depending on your setup, if you have manually entered a rate you may need to adjust this.
If you make a gain on the sale of an investment, capital gains tax (CGT) can eat into your profits.
But the good news is you may be able to use some of the sale proceeds to help you save on tax and grow your super. It involves making a super contribution and claiming a tax deduction to reduce your tax bill.
Here’s how it works
When you sell an investment for a profit, the taxable capital gain is added to your other income and taxed at your marginal rate, which can be up to 47%¹ including Medicare levy.
But if you use some of the sale proceeds to make a super contribution and claim a tax deduction:
you can offset some (or all) of the taxable capital gain, and
the super contribution will generally be taxed at only 15% (or 30% if your income from certain sources is over $250,000).
By using this strategy, you may pay less tax on the sale of the investment. Also, once the money is invested in super, you can benefit from ongoing tax concessions. Earnings in super are taxed at a maximum rate of 15% (or 0% if the investments are supporting a ‘retirement phase pension’).
Case Study: Tax savings from deductible super contribution
Anna, aged 42, is self-employed and earns a taxable income of $100,000 pa. She sold some shares for $80,000 and made a taxable capital gain of $20,000. If she doesn’t make a deductible super contribution, the gain will be taxed at her marginal rate of 32%¹. She’ll therefore have to pay tax of $6,400, leaving $13,600 for her to save, invest or spend.
If she makes a deductible super contribution of $20,000², she’ll offset the taxable capital gain and 15% tax ($3,000) will be deducted from the super contribution. By making a deductible contribution, she’ll save $3,400 in tax and add a net $17,000 to her super.
Key issues to consider
It’s generally not tax-effective to claim a tax deduction for an amount that reduces your taxable income below the effective tax-free threshold. This is because you would end up paying more tax (you will pay tax on the super contribution but get no tax benefit from the tax deduction claimed).
To be eligible to claim the super contribution as a tax deduction, you need to submit a valid ‘Notice of Intent’ form before certain timeframes. You’ll also need to receive an acknowledgement from the super fund before you complete your tax return, start a pension or withdraw or rollover money from the fund to which you made your personal contribution.
Personal deductible contributions count towards your ‘concessional contribution’ cap. This cap is $30,000 in 2024/25, but may be higher if you didn’t contribute your full concessional contribution cap in any of the previous five financial years and are eligible to make ‘catch-up’ contributions. Tax implications and penalties may apply if you exceed your cap.
If you’re between ages 67 and 74 at the time you make the contribution, you’ll need to have met a work test or satisfy the work-test exemption. Generally, you cannot make a personal deductible contribution if you’re aged 75 or older.
You can’t access super until you meet certain conditions.
While this strategy has some potentially powerful benefits, you should seek tax and financial advice before going ahead, to ensure it suits your needs and circumstances.
The information contained in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs and, where appropriate, seek professional advice from a financial advisor. This site is designed for Australian residents only. Nothing on this website is an offer or a solicitation of an offer to acquire any products or services, by any person or entity outside of Australia. Robin Bell, Martin Cimino, Angelo Adam and Allan Hall Financial Planning Pty Ltd are Authorised Representatives of Consultum Financial Advisers Pty Ltd ABN 65 006 373 995 AFSL 230323.
¹ Includes 2% Medicare levy ² Anna is eligible for and uses catch-up contributions.
For those wanting to maximise your personal contributions in 2024/25, please carefully review the limits and information provided below. There is no increase in the contribution limits taking effect from 1 July 2025 however there will be an increase in the Total Superannuation Balance threshold from $1.9m to $2m which is relevant for making non concessional contributions.
Financial Year
Concessional Cap (pre-tax)
Non-concessional Cap (after tax)
(Employer / Salary Sacrifice Personal Deductible)
(Personal After Tax & subject to Total Super Balance <$1.9m)
2024/25
$30,000
$120,000
Concessional Contributions
Your contributions must be received in your super fund before 30 June 2025 to ensure that:
you are eligible to claim a deduction in 2024/25 for your contributions made;
the contribution is counted against your limit in the correct financial year.
Please remember that 30 June 2025 falls on a Monday so please do not leave your contributions until the last minute. They need to be cleared in the fund’s bank account on 30 June. Please allow at least three days for any interbank transfer to occur. If making contributions to a retail or industry super fund please ensure your contributions are made by 20 June to ensure they are allocated to your member account by 30 June.
Be sure to check the amount of actual employer or personal contributions already received / due to be received in your super fund before making any top up contributions.
‘Catch Up’ Concessional Contributions
These rules commenced on 1 July 2018 so we are now into the sixth year of ‘catch up’ contributions whereby a person with a super balance of less than $500,000 as at 30 June 2024 is able to make a personal concessional contribution in 2024/25 equal to the unused amount of the concessional contribution limits applicable from 2019/20 to 2023/24. Please note that 2024/25 is the last year in which any unused contributions from 2019/20 can be claimed as they drop off after five years.
Financial Year
Applicable limit
2019/20
$25,000
2020/21
$25,000
2021/22
$27,500
2022/23
$27,500
2023/24
$27,500
For example, Sam had employer contributions of $15,000 for each of 2019/20, 2020/21 and 2021/22 and then $18,500 for each of 2022/23 and 2023/24. This means Sam has $50,500 in unused or ‘catch up’ contributions. His total superannuation balance at 30 June 2024 was $380,000. If Sam has higher than normal taxable income in 2024/25, due to say, a capital gain then, in addition to his current year 2024/25 contributions he can contribute an extra $50,500 as a personal concessional contribution before 30 June 2025 to reduce his taxable income. Please contact us if you want to check your unused catch up contribution amount.
Work Test
Any person aged 67-74 must meet the work test before they can claim a tax deduction for a personal contribution. To satisfy the work test, you must work at least 40 hours in a consecutive 30 day period at some time during 2024/25.
Any person aged 75 or older is unable to make personal contributions, their super fund can only accept mandated employer contributions (i.e. superannuation guarantee amounts) on their behalf.
Non Concessional Contributions
It is possible to ‘bring forward’ up to 3 years of contributions in 2024/25 if you were under age 75 on 1 July 2024 and your total superannuation balance at 30 June 2024 was within the thresholds noted below:
Total Super Balance as at 30 June 2024
Age <75 on 1 July 2024
Your Total Super Balance is the combined total of all balances in super funds of which you are a member
Less than $1,660,000
$360,000
Greater than $1,660,000 but less than $1,780,000
$240,000
Greater than $1,780,000 but less than $1,900,000
$120,000
Greater than $1,900,000
$0
Please note for planning purposes that the contribution limits will not change but the bring forward thresholds will change on 1 July 2025 with effect for 2025/26. These changes are noted in the following table below:
Total Super Balance as at 30 June 2025
Age <75 on 1 July 2025
Less than $1,760,000
$360,000
Greater than $1,760,000 but less than $1,880,000
$240,000
Greater than $1,880,000 but less than $2,000,000
$120,000
Greater than $2,000,000
$0
Strategy Tip
If wanting to maximise super contributions, consider contributing only $120,000 in 2024/25 to enable a contribution of $360,000 in 2025/26, provided all eligibility criteria are met.
If wanting to equalise super balances between spouses, consider a withdrawal from the high balance and a contribution into the low balance. This is useful for optimising the member balances to take full advantage of the pension cap and various eligibility provisions associated with a person’s total superannuation balance. It also has the effect of lowering the ‘taxable’ portion of that member’s benefit which reduces any future tax payable on death benefits received by the beneficiaries. Please talk to us if you are keen to learn more about this.
Minimum Pension 2024/25
If you are in pension phase, please check to ensure you have withdrawn your minimum pension for this financial year before 30 June 2025. Where these requirements have not been met your fund will be subject to 15% tax on its pension asset investment earnings, rather than being tax-free.
For our SMSF clients, the amount would have been notified to you in the completion letter in the FY24 financials package. Please contact us if you are unsure of your minimum pension payment for 2024/25.
CONTACT US if you would like to discuss any of the above strategies in more detail.
Superannuation Industry Hits $4.1 Trillion in Assets: September 2024 Snapshot
Strong Growth in Contributions and Benefit Payments Highlights Industry Momentum
The Australian Prudential Regulation Authority (APRA) has released its Quarterly Superannuation Performance publication and the Quarterly MySuper Statistics report for the September 2024 quarter.
Key statistics for the superannuation industry as at 30 September 2024:
September 2023
September 2024
Change
Total superannuation assets
$3,599.3 billion
$4,083.0 billion
+13.4%
Total APRA-regulated assets
$2,459.2 billion
$2,829.7 billion
+15.1%
Total self-managed super fund assets
$924.0 billion
$1,024.4 billion
+10.9%
Exempt public sector superannuation schemes assets
$160.0 billion
$171.6 billion
+7.3%
Balance of life office statutory fund assets
$56.1 billion
$57.3 billion
+2.1%
Total superannuation assets increased by 3.7 per cent over the quarter to reach $4.1 trillion as at September 2024, of which $2.8 trillion are in APRA-regulated funds.
Total contributions increased by 13.1 per cent to $191.3 billion in the year ending in September 2024. Of this, employer contributions increased by 11.4 per cent over the year to $140.8 billion. Member contributions increased by 18.1 per cent over the year to $50.5 billion.
Benefit payments increased by 11.4 per cent to $119.9 billion in the year ending in September 2024. This increase was the result of lump sum payments rising by 4.9 per cent to $65.1 billion and pension payments increasing by 20.3 per cent to $54.8 billion.
Key statistics for entities with more than six members for the year to September 2024:
September 2023
September 2024
Change
Total contributions
$169.1 billion
$191.3 billion
+13.1%
Total benefit payments
$107.6 billion
$119.9 billion
+11.4%
Net contribution flows*
$58.2 billion
$66.0 billion
+13.5%
*Net contribution flows comprise of contributions plus net benefit transfers, less benefit payments
A well performing self-managed superannuation fund (SMSF) has the potential to be your most profitable and tax effective means to an outstanding retirement. However, just like an elite athlete needs an experienced coach, an SMSF needs the guidance of an expert SMSF mentor. This is where our Allan Hall Superannuation team can help.
Australia’s under-18 workforce could benefit from an additional $10,000 in retirement savings if outdated rules excluding them from superannuation contributions are abolished, according to a new report by the Super Members Council (SMC).
Currently, under-18 workers must clock more than 30 hours a week to qualify for compulsory super contributions. This complex and discriminatory rule denies approximately 505,000 teenage workers $368 million annually, an average of $730 each.
The report highlights that:
A typical teenager working two years could accumulate $2,200 in super contributions, setting them on a path to long-term financial security
By retirement, these savings would grow to an additional $10,000, leveraging the power of compound interest
The report calls for removing the 30-hour threshold, a move that simplifies employer administration while promoting equity.
SMC CEO Misha Schubert emphasised the importance of this reform:
“Every Australian worker deserves the opportunity to build a dignified retirement, starting with their first job. Extending super to under-18s ensures their savings grow from day one, simplifying compliance for businesses and delivering a fairer system.”
The report recommends a phased implementation to ease the transition for businesses, citing similar adjustments for other worker categories in 2022.
This initiative aligns with strong public support, as 85% of Australians believe all paid workers deserve super contributions. The SMC hopes to collaborate with employer groups to achieve this reform, ensuring Australia’s youth can fully benefit from the nation’s superannuation system.
The Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Bill 2024 marks a pivotal step in addressing the gender gap in retirement savings.
Economists, industry advocates and employers have welcomed this reform, praising it as a long-overdue measure to improve women’s financial security and help close the gender gap in retirement savings.
By ensuring that Paid Parental Leave includes super contributions, the Bill acknowledges the reality that caregiving responsibilities should not come at the cost of a secure retirement.
Employers please note:
The new Bill takes effect from 1 July 2025
Amendment provides eligible parents with an additional 12% of their Paid Parental Leave as a super contribution
This contribution will be in line with the SG rate and will increase over time with any future adjustments to the legislated rate.
Introduced as part of the Government’s broader reforms, this Bill extends superannuation contributions to Paid Parental Leave, providing financial support for families and working parents, particularly women.
The new Bill, which takes effect on 1 July 2025, directly addresses this gap by providing eligible parents with an additional 12% of their Paid Parental Leave as a super contribution. This contribution will be in line with the Superannuation Guarantee (SG) rate and will increase over time with any future adjustments to the legislated rate. For many families, this change could amount to a super contribution of up to $3,150, a significant boost that will grow as the Paid Parental Leave scheme reaches 26 weeks by 2026.
This amendment builds on previous government efforts to strengthen the superannuation system, ensuring that more Australians, particularly women, can look forward to a dignified retirement. Alongside reforms to improve the flexibility, duration and income thresholds for Paid Parental Leave, this change underscores the importance of supporting working families both at the time of birth and in the long term.
As this Bill takes effect, it represents a significant investment in the future of working women, ensuring that their contributions—both in the workplace and at home—are recognised and valued, setting a new standard for financial equity in Australia.
For decades, women — who make up the majority of primary caregivers — have faced financial setbacks after becoming parents. Research shows that, on average, women experience a 55% reduction in earnings during the first five years of parenthood, a loss that compounds over time. This drop in income, coupled with the compounding effects of superannuation contributions based on lower wages, has left women retiring with around 25% less super than men.
If you are looking to maximise your personal contributions in 2023/24, please carefully review the limits and information provided below.
There will be an increase in the contribution limits taking effect from 1 July 2024 so these are also noted below for planning purposes.
Financial Year
Concessional Cap (pre-tax)
Non-concessional Cap (after tax)
(Employer / Salary Sacrifice Personal Deductible)
(Personal After Tax & Subject to Total Super Balance <$1.9m)
2023/24
$27,500
$110,000
2024/25
$30,000
$120,000
Concessional Contributions
Your contributions must be received in your super fund before 30 June 2024 to ensure that:
you are eligible to claim a deduction in 2023/24 for your contributions made;
the contribution is counted against your limit in the correct financial year.
Please remember that 30 June 2024 falls on a Sunday so please do not leave your contributions until the last minute. They need to be cleared in the fund’s bank account by no later than Friday 28 June 2024. Please allow at least three days for any interbank transfer to occur.
Be sure to check the amount of actual employer or personal contributions already received / due to be received in your super fund before making any top up contributions.
Any person aged 67-74 must meet the work test during 2023/24 in order to be able to claim a deduction for any personal contributions. See below for further detail. Any person aged 75 or older is unable to make personal contributions.
‘Catch Up’ Concessional Contributions
These rules commenced on 1 July 2018 so we are now into the fifth year of ‘catch up’ contributions whereby a person with a super balance of less than $500,000 as at 30 June 2023 is able to make a personal concessional contribution in 2023/24 equal to the unused amount of the concessional contribution limits applicable from 2018/19 to 2022/23. Please note that 2023/24 is the last year in which any unused contributions from 2018/19 can be claimed as they drop off after five years.
Financial Year
Applicable limit
2018/19
$25,000
2019/20
$25,000
2020/21
$25,000
2021/22
$27,500
2022/23
$27,500
For example, Sam had employer contributions of $15,000 for each of 2018/19, 2019/20 and 2020/21 and $18,500 for each of 2021/22 and 2022/23. His total superannuation balance at 30 June 2023 was $380,000. If Sam has higher than normal taxable income in 2023/24, due to say, a capital gain then, in addition to his current year 2023/24 contributions he can contribute an extra $48,000 as a personal concessional contribution before 30 June 2024 to reduce his taxable income. The extra $48,000 comprises $30,000 in unused contributions from 2018/19 to 2020/21 and $18,000 in unused contributions from 2021/22 and 2022/23.
Please contact us if you want to check your unused catch up contribution amount.
Non Concessional Contributions
It is possible to ‘bring forward’ up to 3 years of contributions in 2023/24 if you were under age 75 on 1 July 2023 and your total superannuation balance at 30 June 2023 was within the thresholds noted below:
Total Super Balance as at 30 June 2023
Age <75 on 1 July 2023
Your Total Super Balance is the combined total of all balances in super funds of which you are a member
Less than $1,680,000
$330,000
Greater than $1,680,000 but less than $1,790,000
$220,000
Greater than $1,790,000 but less than $1,900,000
$110,000
Greater than $1,900,000
$0
Please note for planning purposes that the bring forward thresholds will change on 1 July 2024 with effect for 2024/25. These changes are noted in the following table below:
Total Super Balance as at 30 June 2024
Age <75 on 1 July 2024
Less than $1,660,000
$360,000
Greater than $1,660,000 but less than $1,780,000
$240,000
Greater than $1,780,000 but less than $1,900,000
$120,000
Greater than $1,900,000
$0
Strategy Tip
If wanting to maximise super contributions, consider contributing only $110,000 in 2023/24 to enable a contribution of $360,000 in 2024/25, provided all eligibility criteria are met.
If wanting to equalise super balances between spouses, consider a withdrawal from the high balance and a contribution into the low balance. This is useful for optimising the member balances to take full advantage of the pension cap and various eligibility provisions associated with a person’s total superannuation balance. It also has the effect of lowering the ‘taxable’ portion of that member’s benefit which reduces any future tax payable on death benefits received by the beneficiaries. Please talk to us if you are keen to learn more about this.
If you are aged 67 to 74 years, you must satisfy a work test in order to be eligible to claim a tax deduction for your personal concessional contributions.
Work Test
To satisfy the work test, you must have worked at least 40 hours in a consecutive 30-day period in the 2023/24 financial year.
If you are aged 75 or over, your super fund is only able to accept mandated employer contributions (i.e. superannuation guarantee amounts) on your behalf.
Minimum Pension 2023/24
If you are in pension phase, please check to ensure you have withdrawn your minimum pension for this financial year before 30 June 2024. Where these requirements have not been met your fund will be subject to 15% tax on its pension asset investment earnings, rather than being tax-free.
For our SMSF clients, the amount would have been notified to you in the completion letter in the FY23 financials package. Please contact us if you are unsure of your minimum pension payment for 2023/24.
CONTACT US if you would like advice on any of the above strategies that may benefit your circumstances.
