Superannuation rates and thresholds increase from 1 July 2021

The latest AWOTE details released by the ABS have been used to calculate the following superannuation rates and thresholds for 2021-22.

Contribution caps

The concessional contributions cap is set to increase to $27,500 (up from $25,000 since 2017-18). As the concessional cap is now only indexed in $2,500 increments, the AWOTE index was (finally) sufficient to trigger an increase for 2021-22.

The non-concessional contributions cap (which is set at 4 times the concessional cap) has increased $110,000 for 2021-22. Under the bring-forward rule you can contribute up to 3 years of NCC i.e. $330,000 (subject to the other eligibility requirements).

The Capital Gains Tax cap amount for non-concessional contributions is $1.615m for 2021-22 (up from $1.565m).

Co-contributions

The government co-contribution “lower income threshold” is $41,112 for 2021-22 (up from $39,837 for 2020-21); “higher income threshold” is $56,112 (up from $54,837).

Super guarantee

While the current super guarantee (SG) rate is already legislated to increase from 9.5% to 10% from 1 July 2021, the “maximum contribution base” will rise to $58,920 per quarter for 2021-22 (up from $57,090 for 2020-21).

An employer is not required to provide the minimum super guarantee support for that part of an employee’s ordinary time earnings (OTE) above the quarterly maximum contribution base (ie $58,920 for 2021-22). This quarterly maximum represents a per annum equivalent of $235,680 for 2021-22).

Super benefits

The following indexed thresholds apply for 2021-22:

• Superannuation lump sum low rate cap – $225,000 (up from $215,000);
• Untaxed plan cap – $1.615m (up from $1.565m);
• ETP cap amount – $225,000 (up from $215,000);
• Genuine redundancy and early retirement payments – tax-free amounts: base amount – $11,341 (up from $10,989); service amount – $5,672 (up from $5,496).

If you have any questions about the above superannuation rates and thresholds for 2021-22, then please contact our office and speak to Iggy Moro.