What’s changed with super after the 1st of July 2021

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HomeBlogWhat’s changed with super after the 1st of July 2021
From the 1st of July 2021, there have been some updates to your super.
Here’s the top changes to check out:

1. The super guarantee is increasing to 10%

From the 1st of July 2021, the super guarantee increased from 9.5% to 10%. This is the amount that your employer must contribute into your super account.
If you’re over 18 and earn over $450 (before tax and excluding overtime)* in any month, your employer will be required to pay you super (the super guarantee). After the 1st of July, this has increased to 10%.

Check you’re being paid the right amount

Make sure to double check your payslips for any super earned after the 1st of July 2021 to make sure you’re receiving the right amount of super.
Remember, super on your payslip does not necessarily mean it’s been paid. Employers put aside super to be paid by the quarterly due dates. The first deadline for super payments at 10% will be the 28th of October 2021.

2. The government co-contribution threshold is increasing

The government co-contribution is an incentive where the government rewards you for making contributions to your super account. From the 1st of July 2021, the government co-contribution thresholds have gone up. The lowest income threshold has increased to $41,112 and highest income threshold has increased to $56,112 p.a. This could mean you’re eligible to receive the co-contribution this year!
If you earn below the lowest income threshold and make a personal contribution to your super account, the government will co-contribute 50c for every $1 you contribute.
The co-contribution decreases progressively as your income increases. The maximum co-contribution you’ll receive is $500.
Lowest income thresholdHighest income threshold
2021-22
$41,112
$56,112
For example, if you make a $100 personal contribution into your super account and you earn below $41,112 p.a., you could be eligible for the best rate of co-contribution. The government will contribute $50 into your super account. This happens automatically when you lodge your tax return. Read more about personal contributions.

Check if you’re eligible

If you weren’t eligible for the co-contribution before, you could be now that the threshold has increased. Double check your annual salary and see if you can take advantage of this government incentive for the next financial year.

3. The amount you can contribute to super is increasing

From the 1st of July 2021 the super contributions caps increased. The concessional contribution cap is now $27,500 p.a. and the non-concessional cap increased to $110,000 p.a.
Cap from the 1st of July 2021
Concessional contributions cap
These are before tax contributions including employer contributions, salary sacrificed contributions and contributions you have claimed a tax deduction for.
$27,500
Non-concessional contributions cap
These are after tax contributions.
$110,000
See the ATO website for more information about the “bring-forward” arrangement.

Check how much you can contribute

The increase in the contributions cap means you can contribute more to your super account without paying extra tax. To calculate how much you can contribute, check your transactions on your super account and deduct them from the relevant cap. The leftover amount is how much you could contribute to your account.

Claiming tax deductions

To claim a tax deduction on your personal contribution, first, check your eligibility. If you claim a tax deduction, your non-concessional contribution will become a concessional contribution.
Just remember, if you made a personal contribution to get the government co-contribution, you will not be eligible if you claim a tax deduction.
For example:
Jessica is considering making a personal contribution to her super account. She wants to claim a tax deduction for this contribution, so she needs to ensure her contribution is below the concessional contribution cap.
In the financial year 2021-2022, Jessica’s salary is $58,000 p.a.
  • The super guarantee is 10%, so her employer will contribute $5,800.
  • She doesn’t have any salary sacrifice contributions.
  • She isn’t eligible for the government co-contribution as she earns above the threshold.
Concessional cap
$27,500
Super guarantee payments
-$5,800
Total concessional cap remaining
$21,700
Jessica can contribute a maximum of $21,700.
She will need to make personal contributions to her super account before 30th June 2022 so they can be included in this financial year. On the 1st of July 2022, she will create a notice of intent to claim a tax deduction for these contributions. She can do this by logging into her super account and completing the e-form. She will then receive an email with all the information required to claim a deduction on her tax return.
We hope this wrap up of the new changes has been useful! It’s important to know what might affect you and whether you will be eligible for government incentives and opportunities to claim a tax deduction.
*If you are under 18, you will need to earn over $450 in a month and work over 30 hours in a week to be eligible for super.
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