Key Points

•  The ATO has recently published the key superannuation rates and thresholds for the 2021–22 year. See below for more detail.
• Effective 1 July 2021, employers will be required to increase the minimum superannuation contribution to employees from 9.5% of ‘Ordinary Time Earnings’ (OTE) to 10%.

Full Article

Superannuation is widely regarded as the most tax-effective vehicle for retirement savings.  The ATO has recently published the key superannuation rates and thresholds for the 2021–22 year.

Effective 1 July 2021, employers will be required to increase the minimum superannuation contribution to employees from 9.5% of ‘Ordinary Time Earnings’ (OTE) to 10%.

Some of these rates and thresholds have also been indexed following the average weekly ordinary time earnings figures released by the Australian Bureau of Statistics.

The key superannuation rates and thresholds provide that for 2021–22:

• the concessional contributions cap is $27,500
• the non-concessional contributions cap is $110,000
• the Capital Gains Tax cap amount for non-concessional contributions is $1.615 million
• the Div 293 tax threshold amount is $250,000
• the maximum super contribution base is $58,920 per quarter
• the maximum superannuation co-contribution entitlement remains at $500, the lower-income threshold increases to $41,112 and the higher-income threshold increases to $56,112
• the low-rate cap amount is $225,000
• the general transfer balance cap is $1.7 million
• the defined benefit income cap is $106,250
• the employment termination payments cap amount for life benefit termination payments and death benefit termination payments is $225,000, and
• the base limit of the tax-free part of genuine redundancy payments and early retirement scheme payments is $11,341, and for each complete year of service is $5,672.

If you have any questions or need advice and clarity specific to your business, feel free to contact Semmens & Co on 03 8320 0320 for a free consultation.