There have been some changes to both the Concessional Contribution limits and the Employer SG rate for the 2013/14 Financial Year.
The Government is simplifying the proposed higher Concessional Contributions cap by providing a $35,000 cap to anyone who meets certain age requirements. The start date for the higher cap will be brought forward to 1 July 2013 for people aged 60 and over. Those aged 50 and over will be able to access it from 1 July 2014.
To summarise, the Concessional Contributions cap for the 2013/14 Financial Year is as follows:
- For those aged 60 and over, your Concessional Contributions cap for this financial year is $35,000
- For those under age 60, your Concessional Contributions cap for this financial year is $25,000
It is also important to note that from 1 July 2013, the SG (Superannuation Guarantee) rate increased from 9% to 9.25% as part of the government’s initiative to increase the SG rate to 12% by 2019. As all SG contributions count towards your Concessional Contributions cap, it is important to factor this in when deciding on an amount to salary sacrifice.
The bottom line: It may be time to review your salary sacrifice strategy.
If you would like to discuss your salary sacrifice strategy or any other part of your financial situation, please get in touch via the contact us page.