The main changes to Superannuation payments from 1 July 2024:
- Superannuation Guarantee (SG) Contribution Rates
- Concessional Contribution Cap and Unused Cap Amounts
- Non-Concessional Contribution Cap and Bring-Forward Arrangements
- Payday Super
- National Employment Standards (NES) and the Right to Superannuation
- Superannuation Payments for Contractors
Key points to remember:
- The SG rate, which determines how much an employer must contribute to employee super funds, will increase from 11% to 11.5% on 1 July 2024.
- Contributions to concessional (before-tax) super will increase from $27,500 to $30,000.
- From the 2024-25 financial year, the non-concessional (after-tax) super contributions cap will also increase to $120,000.
Superannuation Guarantee (SG) Contribution Rate Rise
The SG rate will increase from 11.00% to 11.50% from 1 July 2024. You must contribute more money to your employees' super accounts as an employer. The SG rate will increase on 1 July 2025 to 12%.
The Australian Government has increased superannuation contribution caps for the first time since July 2021. Concessional and non-concessional contribution limits will increase.
Super Concessional Contributions
Contributions made by an employer on an employee's behalf, including salary sacrifice, are considered Super concessional contributions, which are tax deductible.
Super Concessional contributions are usually made personally by the employer or the employee to an employee's super account.
Concessional Contribution Types
Concessional contributions fall into three categories:
- Superannuation guarantee (SG) contributions
- Salary sacrifice super contributions
- Personal concessional contributions.
For 2024-25, concessional contributions will be capped at $30,000 instead of $27,500.
Contributions after-tax for non-concessional contributions
Employees who make personal, after-tax contributions can contribute more to their super from 1 July 2024, as the annual contribution cap is increasing from $110,000 to $120,000.
If you are under 75 years old and your total super balance was less than $1.9 million on 30 June, you can contribute after tax.
Superannuation Changes Summary
The table below shows the changes to superannuation that are effective on 1 July 2024, compared to 2023/2024 rates.
|
Rates and Thresholds |
2023/2024 |
2024/2025 |
|
Superannuation Guarantee rate |
|
|
|
11.00% |
11.50% |
|
Concessional Contribution Cap |
$27,500 |
$30,000 |
|
Non-Concessional Contribution Cap |
|
|
|
$110,000 |
$120,000 |
|
$330,000 |
$360,000 |
Payday Superannuation
As of 1 July 2026, all employers must include payment of super contributions when they pay their salaries. Learn why Payday Super is better for business and how it impacts employers and employees.
The 2026 start date allows employers, super funds, payroll providers, and other parts of the superannuation system to prepare for the change. However, a law governing this measure has yet to be passed. For more information, see the Hon. Stephen Jones MP joint media release Introducing Payday Super.
National Employment Standards (NES) include the Right to Superannuation
From 1 January 2024, all employees covered by the National Employment Standards (NES) can take court action under the Fair Work Act to recover unpaid or underpaid superannuation contributions.
A breach of the NES provision would not result from employers having met their obligations under superannuation guarantee laws.
The Australian Taxation Office (ATO) ensures compliance with employer obligations under superannuation guarantee laws.
In unpaid superannuation cases, the Fair Work Ombudsman can refer them to the Australian Taxation Office.
Further information can be found on the Fair Work website:
Superannuation Payments for Contractors
Many employers assume contractors are not entitled to superannuation since they are independent businesses with an Australian Business Number (ABN). However, this is not always the case.
Generally, contractors must be paid super if they are wholly or principally engaged in labour. A contract may be considered 'wholly or primarily for labour' if the contractor performs the following:
- Paid mainly for their labour.
- Paid for their personal labour and skills (including physical, mental or artistic labour) rather than a result.
- Performs the work personally and cannot delegate it.
As a rule, the SG is calculated based on the labour component of the contract; however, if you cannot figure out the labour component, you can use a reasonable market value.
ATO Tools
To determine whether your worker is entitled to super payments, you can use two tools provided by the Australian Tax Office (ATO):
- Employee/contractor decision tool helps you determine if your worker is an employee or contractor for super and tax purposes.
- Superannuation guarantee eligibility decision tool helps you determine if your worker is eligible for SG, including any contractors treated as employees for super purposes.
Exemptions to Super Payments for Contractors
You are not required to pay super to your contractor if they are:
- Under 18 and working less than 30 hours per week
- A domestic or private worker, such as a nanny, carer or housekeeper, works less than 30 hours per week
- Provides services through an incorporated company.
The Quick Guide to Payroll Compliance 2024
The payroll compliance landscape for Australian businesses is always changing, and there are quite a few changes for 2023/2024. Download The Quick Guide to Payroll Compliance 2024 to stay informed on payroll updates.