From the 1st of July 2022, there have been some updates to your super.
Here’s the top changes to check out:
1. The super guarantee is increasing to 10.5%
From 1 July 2022, the super guarantee increased from 10% to 10.5%. This is the amount that your employer must contribute into your super account.
If you’re aged 18 and have a job, your employer will be required to pay you super (the super guarantee). After 1 July 2022, the amount increased to 10.5%.
Check you’re being paid the right amount
Make sure to double check your payslips for any super earned after 1 July 2022 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 10.5% will be 28 October 2022.
2. The government co-contribution income thresholds are increasing
The government co-contribution is an incentive where the government rewards you for making contributions to your super account. From 1 July 2022, the government co-contribution income thresholds have gone up. The lowest income threshold has increased to $42,016 p.a. and highest income threshold has increased to $57,016 p.a. This could mean you’re eligible to receive the co-contribution this financial 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 threshold||Highest income threshold|
For example, if you make a $100 personal contribution into your super account and you earn below $42,016 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 First Home Super Saver Scheme maximum releasable amount is increasing to $50,000
The First Home Super Saver Scheme (FHSSS) helps you save for a home deposit inside your superannuation account. From 1 July 2022, the amount of eligible contributions that can count towards your maximum releasable amount across all years has increased from $30,000 to $50,000.
You can save up to $15,000 per financial year, up to a maximum of $50,000. When you are ready to purchase your first home, you can withdraw up to $50,000 plus associated earnings, less any taxes. Check your eligibility
The benefits of saving for a home inside your super
With the FHSSS, there can be a tax benefit as the money is being saved inside your super account and super gets a special tax treatment. You generally only pay 15% tax on earnings within super.
This is compared to when you save the same amount of money in a savings account. You will be required to pay tax on the interest you earn, taxed at your personal income tax rate (this percentage increases as your salary increases and can be up to 47%).
Note: The $50,000 limit on eligible contributions will only apply to requests for FHSS determinations made from 1 July 2022. The previous $30,000 limit on eligible contributions will apply to requests for FHSS determinations made before 1 July 2022.
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 work over 30 hours in a week to be eligible for super.