Superannuation Rate and Thresholds for 2017 – 2018
The Australian Taxation Office (ATO) has released the key superannuation rates (including super guarantee rates) and thresholds for the 2017 – 2018 financial year.
- Concessional Contributions Cap – the cap will reduce to $25,000 for the 2017/18 year, due to superannuation measures introduced as part of the 2016 Federal Budget.
Concessional contributions are contributions that you or your employer make to your super with before-tax income or claim as a tax deduction. They are also referred to as employer or before-tax contributions.
- Non-concessional Contributions Cap – the cap for 2017/18 will reduce to $100,000. Additionally, anyone that has super worth over $1.6 million will not be eligible to make personal (non-concessional) contributions to super.
Non-concessional contributions are contributions you or your spouse make to your super from your after-tax income. They are also referred to as personal or after-tax voluntary contributions.
- Superannuation Guarantee (SG) – the SG rate remains at 9.50%, with the maximum super contribution base for 2017/18 increasing to $52,760 per quarter.
SG contributions are the compulsory contributions which most employees are eligible to receive, paid by their employer to super on their behalf.
- Superannuation Co-contribution – the maximum co-contribution entitlement for the 2017/18 year remains at $500. The lower income threshold (for full entitlement) increases to $36,813 and the higher income threshold (cut-off for eligibility) increases to $51,813.
The super co-contribution is designed to help lower-income earners save for their retirement by providing a government top-up where an eligible person makes a personal contribution to super.
- Superannuation Benefits Caps – the low rate cap amount for 2017/18 will increase to remains at $200,000.
The low rate cap is the amount that is able to be withdrawn tax-free over a lifetime for people that have reached their preservation age (see below), but are not yet 60 (when super withdrawals become entirely tax-free) – please note other eligibility criteria apply for making a withdrawal.
- Preservation Age – to meet preservation age during 2017/18, your date of birth must be 30 June 1961 or earlier.
Super is preserved for your retirement and has government-placed restrictions on when it can be accessed. Some conditions for accessing super rely on a person firstly reaching their preservation age.
- Capital Gains Tax (CGT) Cap Amount – the CGT cap amount for 2017/18 increases to $1,445,000.
The CGT cap is the lifetime super contribution limit for proceeds from the disposal of eligible small business assets.