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.
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.
Cloud-based SMSF administration provider Class has revealed new insights from its Benchmark Report, highlighting that Millennials and Generation X collectively accounted for over 85% of new SMSF establishments in the six months to 31 December 2024.
Key findings include:
Millennials surged to 33.6% of new SMSFs, up from 28.5% in mid-2024
Generation X remains dominant, though slightly declined from 52.6% to 51.9%
Baby Boomers saw a notable drop, falling from 17.5% to 13.4%
The total value of net assets administered on Class increased by 9.2% to $355.9 billion, covering 184,830 SMSFs and 345,570 members.
With SMSFs now making up over $1 trillion (25.1%) of Australia’s $4.08 trillion superannuation industry, demand for self-managed funds continues to rise.
Maximising SMSF Success: The Growing Need for Expert Financial Advice
The report found that 70% of SMSFs remain unadvised, widening the gap between supply and demand for financial advice. While trustees accessing advice has remained stable, advised SMSFs outperform non-advised funds (7.6% vs 6.4%), reinforcing the value of professional guidance.
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.
Trustees of self-managed superannuation funds (SMSFs) face strict tax and super laws when undertaking repairs and renovations on real estate held within the SMSF.
Many trustees wonder what they can legally do to enhance the value of their fund’s property without falling foul of these strict rules.
Trustees must ensure that any services provided to a SMSF are undertaken on an arm’s length basis. Failure to do so may result in some of the fund’s income being taxed at 45% under the Non-Arms Length Expenditure (NALE) rules rather than the general superannuation tax rate of 15% or nil if the fund is in pension phase.
Broadly, these rules can apply where the cost of expenses connected with a fund’s property investments, such as property management expenses, repairs and maintenance, etc are less than might be expected in an arm’s length situation.
This does not mean however that a trustee who provides any service to an SMSF must charge a fee – see more information below.
Further, the SMSF needs to be invoiced directly for any goods and materials as otherwise the fund will be deemed to have acquired them from the members directly which is prohibited.
Key Considerations
Who provides the service? Consider activities undertaken by a person in their individual capacity vs in their trustee capacity
Who is invoiced for the goods or service? Acquiring building materials and any other goods or services connected with the property from related parties, even if at market value, will breach the super laws.
Trustee v Individual capacity
A fundamental rule for SMSFs is that a trustee cannot be remunerated for their duties as trustee. This is embedded in superannuation law. Examples of trustee duties include opening a bank account, making investments, collecting rent and paying expenses, and repairing and maintaining assets. However if a service is provided in their individual professional capacity then a fee must be charged.
Examples
Peter is the trustee of his SMSF and he is also a licensed electrician by trade. The SMSF owns a residential property in which Peter undertakes electrical repairs that can only be done by a licensed electrician.
Peter is considered to be acting in his individual capacity because the activities have been performed pursuant to a licence/qualification. The fund must be charged an arm’s length fee for the work.
Michael’s SMSF owns a commercial property and does not engage the services of a property management business. Michael attends to all administrative duties in connection with the lease (eg collecting rent, renegotiating lease terms upon expiry, organising repairs). Michael also mows the lawn, tends to the garden at the property and makes minor repairs using his personal mower and tools. He does not provide these services to others.
These activities are obligations imposed on Michael because he is a trustee of an SMSF (ie they are trustee duties). Michael cannot charge the SMSF fees for these services as he performs them in his capacity as trustee.
Andrew is a licensed builder and performs minor repairs on a jammed door in his SMSF’s investment property using his tools of trade. On another occasion, Andrew builds a deck at the property, largely using timber and materials left over from another job.
Ad-hoc maintenance activities are obligations imposed on Andrew because he is a trustee of his SMSF (ie they are trustee duties). The use of his tools of trade for such activities are minor and infrequent. Building the deck however gives rise to Andrew’s specialist skills as a builder, with such services being offered to the public. As Andrew is acting in his individual capacity he must charge an arm’s length fee to the fund for the work performed.
Further to the example of Andrew above, as the materials for the deck are sourced from Andrew, the SMSF has unknowingly breached the super laws. To avoid such compliance issues, the SMSF trustee must source all materials directly from the supplier and ensure the SMSF is invoiced, not the trustee in their individual capacity.
Consulting a professional before undertaking any repairs or renovations is crucial to ensuring compliance with the law.
If you’ve chosen to manage your own SMSF, it’s likely you’re also proactive and responsible regarding insurance.
Whether you currently hold life insurance outside super or within an existing super fund, starting an SMSF requires attention to your insurance strategy.
SMSF trustees must assess whether to obtain suitable insurance coverage for each fund member as part of developing their investment strategy.
What are the rules?
Legally, all SMSFs must prepare a documented investment strategy during setup.
This strategy—including any insurance coverage—must be regularly reviewed by the fund’s trustees to ensure it aligns with members’ evolving needs and circumstances. Compliance with this investment strategy is checked annually by a licensed SMSF auditor.
In 2015, the Federal Government’s Super System Review found that SMSF members were more likely to hold insurance outside super compared to members in other superannuation sectors. Consequently, SMSFs are not required to provide default insurance for members as many public sector funds do.
However, SMSF trustees still need to carefully consider each member’s financial situation to determine if they have adequate insurance coverage. Key considerations include:
Current debt levels of members
Whether members have dependents and, if so, how those dependents could be financially supported in the event of the member’s death or inability to work.
What types of insurance cover can SMSFs provide?
SMSFs are permitted to offer any insurance cover that aligns with one of these superannuation conditions of release:
Death (life insurance)
Permanent incapacity leading to the member’s permanent cessation of work (total and permanent disability insurance or TPD)
Temporary incapacity that causes the member to stop working temporarily (income protection insurance)
Terminal illness diagnosis (by two medical professionals) indicating likely death within two years, generally included as a feature in life insurance policies.
Note: With TPD insurance, insurers apply different definitions and features. A key distinction in TPD policies is occupation type, with two options:
‘Own occupation’ provides benefits if the member cannot work in their specific role
‘Any occupation’ offers benefits only if the member is unable to work in any gainful role they are reasonably suited for.
SMSFs cannot hold ‘own occupation’ TPD policies unless issued before 1 July 2014, as policies issued after this date must meet a condition of release to ensure proceeds are accessible before members reach preservation age. The ‘any occupation’ definition aligns with the permanent incapacity condition, so it is the permissible definition.
Each of the above conditions of release allows a fund member to access their super funds regardless of reaching preservation age.
Once you determine the insurance cover type you need, you can weigh the benefits of holding it within your SMSF, an existing super fund, or personally, outside super.
Ensure your SMSF’s insurance strategy meets legal standards and protects your members — review your coverage options and compliance obligations today.
Each year you need to value your SMSF assets and provide supporting evidence to your auditor.
One of the many responsibilities SMSF trustees have every income year is valuing your fund’s assets at market value.
The market value of an asset is the amount that a willing buyer and seller would agree to in an arms-length transaction. These valuations will be used when preparing your fund’s accounts, statements and SMSF annual return (SAR).
Your asset valuations will be reviewed by your approved SMSF auditor as part of the annual audit prior to lodgement of your SAR. Your auditor will check that assets have been valued correctly, assess and document whether the basis for the valuations is appropriate given the nature of the asset. They are not responsible for valuing fund assets.
Make sure you get your valuations done before going to your auditor.
It’s your responsibility to provide objective and supportable evidence to your auditor for the valuation of the fund’s assets, including all relevant documents requested to prevent delays in auditing the fund. Failure to do so could result in a potential late lodgement of your annual return or a contravention if mistakes have been made.
Start researching now to find what type of evidence your need to support the valuation as this can take time. For some asset types the law requires valuations to be undertaken by a qualified independent valuer. Find out more by visiting SMSF valuation guidelines.
The Better Targeted Super Concessions Bill which includes the $3 million superannuation tax, faces further uncertainty as it has not been scheduled for debate in the Senate this month.
The Australian government’s proposal to impose an additional 15% tax on superannuation balances exceeding $3 million is progressing through the legislative process.
The draft legislation, introduced to Parliament on 30 November 2023, was referred to the Senate Economics Legislation Committee, which tabled its report on 10 May 2024. The report recommended the bill be passed without changes.
The proposed tax, scheduled to take effect on 1 July 2025, aims to apply a 30% concessional tax rate to future earnings for superannuation balances above $3 million.
Implications for Super Fund Members
The delay raises doubts about whether the bill will be passed before the end of the parliamentary sitting year. The Senate’s draft schedule, released last Friday, does not include the bill for debate.
This change is expected to impact approximately 80,000 individuals, or 0.5% of superannuation account holders. Without Senate approval this year, there are concerns about insufficient time for affected super fund members to restructure their arrangements.
Members with superannuation balances nearing or exceeding $3 million are encouraged to stay informed and consult financial advisors about potential impacts on their retirement planning.
Managing a Self-Managed Super Fund (SMSF) requires a well-structured investment strategy to ensure that retirement goals are met and the fund meets the ‘sole purpose test’.
This test requires the fund to be maintained solely for the purpose of providing retirement benefits to members or their dependants if the member dies before retirement.
All investment decisions need to be made in the members’ best interests and also to meet the sole purpose test. The decisions regarding how the funds are invested need to be documented in the investment strategy.
As per Australian superannuation laws, trustees must develop, implement and regularly review the SMSF investment strategy, ensuring it aligns with the fund’s objectives and its members’ circumstances:
Reflect Member Needs: Circumstances change; make sure the strategy still fits members’ retirement goals and risk profiles
Adapt to Market Changes: Markets shift; adjust the strategy to reflect current economic conditions and protect fund performance
Audit Readiness: Avoid potential audit issues by ensuring the strategy matches actual investments, preventing any compliance breaches
Fund Future-Proofing: Use this review to plan for the next financial year, adjusting for diversification, liquidity and evolving fund goals.
An SMSF investment strategy must consider crucial factors, including risks, diversification, liquidity and insurance coverage for members. It should address how the fund will make, hold and realise assets in a way that meets members’ retirement needs, factoring in their age, employment status and risk appetite. The strategy must be tailored to the fund’s unique circumstances and must go beyond simply restating legislative requirements.
Trustees are free to choose their investment types, provided they comply with superannuation laws. However, placing all investments in one asset class can lead to concentration risk, especially if the asset is leveraged. To mitigate such risks, trustees should outline how the strategy addresses the lack of diversification and ensures the fund’s long-term stability.
Regular reviews of the investment strategy are essential
Significant events like market changes or members transitioning to pension phase should prompt a review to ensure liquidity and cash flow needs are met. Additionally, trustees must demonstrate that these reviews have taken place, with documented evidence available for auditors.
Auditors will assess whether the SMSF has a compliant investment strategy and if it was adhered to throughout the year. In case of breaches, trustees must rectify the situation promptly to avoid penalties or disqualification.
For expert advice on creating or reviewing an SMSF investment strategy, trustees should consult a licensed financial adviser to ensure the strategy’s effectiveness in meeting retirement goals.
The fund’s accountant is generally not able to provide this but can assist trustees to complete a compliant template to create a suitable investment strategy for the fund.
A news article highlights concerns about governance, accountability and service standards within Australia’s $4 trillion superannuation industry.
Recent litigation by ASIC against Cbus Super for delays in death and disability claims has brought attention to systemic issues in the sector. These include allegations of fiduciary duty breaches by trustees, lack of a binding code of conduct, and governance conflicts tied to union affiliations on boards.
Key issues
Transparency and regulatory oversight remain insufficient, leaving members vulnerable
Some funds have begun addressing service issues by insourcing claim management and improving processes
However, the broader sector faces scrutiny for its handling of members’ retirement savings.
If you’re in an industry super fund, now is the time to review your arrangements.
To explore alternatives, including the benefits of an SMSF, reach out to Allan Hall Financial Planning for expert advice tailored to your retirement goals.
