Salary Packaging Additional Super Contributions

🌟 Why It Matters

At the NTAA 2025 Tax Schools Day 1 seminar, experts emphasized how salary sacrificing extra into super can significantly reduce taxable income and boost retirement savings after recent changes in tax rates and contribution caps

📈 What’s New from 1 July 2024

1. Concessional (Pre-Tax) Cap Increased
• From $27,500 to $30,000
• Additional allowance to salary package more before tax, reducing taxable income.
2. Non-Concessional (After-Tax) Cap Increased
• From $110,000 to $120,000
• Larger opportunities for post-tax contributions, especially using bring-forward rules.
3. Stage 3 Tax Cuts Reduce Marginal Rates
• Up to 30% on incomes between $45,001–$135,000; 37% on $135,001–$190,000
• Lower marginal tax rates may impact the relative benefit of salary packaging—but remain effective for many.

✅ Salary Sacrifice into Super is Still Worth It

• Contributions taxed at 15% inside super vs. up to 45% personally—delivering substantial tax savings.
• Particularly effective for those in higher tax brackets or balancing capital gains tax liabilities.

📊 Smart Use of Cap Increases

• Boost pre‑tax super up to $30,000 to reduce taxable income.
• Consider the bring-forward rule on non‑concessional cap ($360,000 over 3 years) for larger contributions

⏱ Timing Matters

• Ensure contributions occur before 30 June 2025 to count in the 2024–25 caps.
• Lodge a Notice of Intent with your fund to claim deductions before you lodge your tax return.

⚠️ Watch Out for ATS:

• Additional contributions may trigger Division 293 tax if total income + super exceeds $250,000.
• Check Your Total Super Balance (TSB) to avoid breaching non-concessional limits.

👥 Who Can Benefit Most

• Higher-income earners wanting to lower taxable income
• Those facing large capital gains from asset sales
• Individuals nearing preservation age seeking accelerated super savings
• Owners of Self-Managed Super Funds (SMSFs) wanting strategic control

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