Yahoo Finance Major super change for 9 million Aussies from July 1: '$17,570 boost'
Compulsory employer superannuation payments will increase from 11 to 11.5 per cent from July 1.
Aussie workers will be getting an automatic boost to their retirement savings when compulsory employer superannuation payments increase next week. The average Aussie will be hundreds of dollars better off each year.
From July 1, the super guarantee rate will rise from 11 to 11.5 per cent. That means your employer will be putting a higher percentage of your pay into your superannuation.
New analysis from the Super Members Council found about 9.2 million Aussies would receive an average of $340 extra added to their super each year, thanks to the change.
RELATED
Super rule punishing Aussie retirees: 'Costs tens of thousands of dollars’
$4,250 superannuation payment to boost Aussies' retirement nest egg
Superannuation shame: 4 dud funds that could cost Aussies a happy retirement
Given super payments are calculated as a percentage of your salary, those on higher wages will receive an even bigger boost. For example, those earning between $100,000 and $149,000 will receive an average of $540, while those earning $200,000 and above will pocket an extra $1,039 each year.
The super guarantee rate will rise again by 0.5 per cent to 12 percent next year on July 1, 2025. This is the final legislated increase.
“Each of these increases might be small, but they are mighty – thanks to the power of compounding returns inside super over our working lives,” Super Members Council CEO Misha Schubert said.
“This latest super boost will mean thousands more for millions of everyday Australians at retirement.”
Do you have a story to share? Contact tamika.seeto@yahooinc.com
The super group estimates a 30-year-old would be receive a $17,570 boost at retirement due to next week’s change. When followed by next year’s rise, it could add $34,000 to their balance by the time they reach the end of their working life.
The change coincides with the stage three tax cuts. Aussies will pocket between $350 and $4,500 in extra cash depending on their income bracket.
For example, someone on the medium income of $67,600 will get a $1,369 tax cut. You can see how much you'll save here.
How much will my super increase?
Here’s how much your superannuation will increase each year because of the super guarantee increase, based on your income.
$1 - $24,999: $58
$25,000 - $49,999: $165
$50,000 - $74,999: $278
$75,000 - $99,999: $386
$100,000 - $149,999: $540
$150,000 - $199,999: $763
$200,000+: $1,039
Other super changes from July 1
Along with your employer’s contributions, you can also add money to your super yourself. The government limits on how much you can do this without being hit with extra tax will be going up from July 1.
The concessional (before tax) contributions cap will increase from $27,500 to $30,000. The non-concessional (after-tax) contributions cap will increase from $110,000 to $120,000.
The bring-forward rule will also change with the limit increase. This rule allows you to make up to three years’ worth of non-concessional contributions in a single financial year and will increase to $360,000.
The government’s super co-contribution income thresholds will also increase. This scheme gives low-income people who contribute to their super up to $500 per year. The lower income threshold will increase to $45,400, while the higher income threshold will go up to $60,400.
Get the latest Yahoo Finance news - follow us on Facebook, LinkedIn and Instagram.
