Superannuation Rates and Thresholds for 2018 – 2019

The Australian Taxation Office (ATO) has released the key superannuation rates and thresholds for the 2018/19 financial year.

• Concessional Contributions Cap – the cap will remain at $25,000 for the 2018/19 year.

Concessional contributions are contributions that you or your employer make to your super with before-tax income or claim as a tax deduction. They are also referred to as employer or before-tax contributions.

• Non-Concessional Contributions Cap – the cap for 2018/19 will remain at $100,000.

Non-concessional contributions are contributions you or your spouse make to your super from your after-tax income. They are also referred to as personal or after-tax voluntary contributions. Anyone that has super worth over $1.6 million is not be eligible to make non-concessional contributions to super.

• Superannuation Guarantee (SG) – the SG rate remains at 9.50%, with the maximum super contribution base for 2018/19 increasing to $54,030 per quarter.

SG contributions are the compulsory contributions which most employees are eligible to receive, paid by their employer to super on their behalf.

• Superannuation Co-Contribution – the maximum co-contribution entitlement for the 2018/19 year remains at $500. The lower income threshold (for full entitlement) increases to $37,697 and the higher income threshold (cut-off for eligibility) increases to $52,697

The super co-contribution is designed to help lower income earners save for their retirement by providing a government top-up where an eligible person makes a personal contribution to super.

• Superannuation Benefits Caps – the low rate cap amount for 2018/19 will increase to $205,000.

The low rate cap is the amount that is able to be withdrawn tax-free over a lifetime for people that have reached their preservation age (see below), but are not yet 60 (when super withdrawals become entirely tax-free) – please note other eligibility criteria apply for making a withdrawal.

• Preservation Age – to meet preservation age during 2018/19, your date of birth must be 30 June 1962 or earlier.

Super is preserved for your retirement and has government-placed restrictions on when it can be accessed. Some conditions for accessing super rely on a person firstly reaching their preservation age.

• Capital Gains Tax (CGT) Cap Amount – the CGT cap amount for 2018/19 increases to $1,480,000.

The CGT cap is the lifetime super contribution limit for proceeds from the disposal of eligible small business assets.

Find out more about what you need to know about super as a small business owner.