Updates to super rates and thresholds from 1 July 2021
Several rates and thresholds relating to super will be changing from 1 July 2021. The main changes are explained below.
Contribution Caps to increase from 1 July 2021
From 1 July 2021 the below superannuation contribution caps will increase which will allow Australians to put more into super.
Concessional contributions are contributions made into super from before-tax monies. The annual concessional contributions cap will increase from $25,000 to $27,500.
Non-concessional contributions are contributions made into super from after-tax monies. The annual non-concessional contributions cap will increase from $100,000 to $110,000.
This also means the bring forward rule applicable to members who were under 65 at the start of the financial year will increase from $300,000 to $330,000 from 1 July 2021.
The general transfer balance cap will increase from $1.6m to $1.7m from 1 July 2021. This cap is a limit on how much super can be transferred to a tax-free retirement pension.
Superannuation Guarantee to increase from 1 July 2021
From 1 July 2021, the SG amount your employer pays into your super will increase from 9.5% to 10% of your salary. This is part of a staged approach to increase the SG amount to 12% in the coming years to help boost your retirement savings.
Temporary reduction to minimum pension payment amounts to continue until 30 June 2022
In response to the COVID-19 crisis and to ease the financial pressure on Australians funding their retirement, the Government temporarily reduced the annual minimum drawdown requirements for account-based pensions by 50% for 2019/20 and 2020/21. This temporary reduction will continue to apply in 2021/22.