Superannuation Changes Are Coming

In good news for retirement planning, from 1 July 2023, the super guarantee will increase from 10.5% to 11%.

As a contractor, depending on your negotiated arrangements, this is likely to mean that your take-home pay will reduce to compensate for the additional payment to your super fund.

More increases of 0.5% are scheduled each financial year until 2025 when the rate reaches 12%.

Be aware that the amount specified on your payslip may not be accurate. To double check that you’re being paid according to the rules, log into your super fund’s website. You can report any unpaid super to the ATO using their online tool.

Downsizer Contributions

Thinking of selling the family home? Since 1 January 2023, people over the age of 55 have been able to make a ‘downsizer contribution’ to their superannuation by selling their home and contributing part of the proceeds. Previously only people 60 and over were eligible to make a downsizer contribution.

Individuals can contribute up to $300,000 and couples can contribute up to $600,000 to their super, even if they’re not normally eligible to add to their super fund.

Super Income Stream Changes

In 2019 the government implemented a temporary 50% reduction in minimum drawdown rates to help counter the impact of COVID-19 disruptions. The temporary drawdown reduction will end on 1 July 2023, and drawdown rates will revert to previous settings.

Reduced Tax Concessions Above $3 million Threshold

If you’re fortunate enough to have a superannuation balance of $3 million or more, changes to your tax rate are coming.

From 2025‑26, the concessional tax rate applied to future earnings for balances above $3 million will be 30% (as opposed to the current rate of 15%). This is only expected to apply to around 80,000 people, and they will continue to benefit from more generous tax breaks on earnings from the $3 million below the threshold.

The $3 million threshold will not be indexed.

Need Help with Superannuation Compliance?

The Ayers Group has an online contractor management solution, backed up by real people, that provides everything you need to manage your contracts, meet your contractual obligations and grow your wealth. Talk to us today about how we can help you manage your superannuation contributions and compliance.