As we begin the 2024/25 financial year, several legislative changes have been introduced that bring fresh opportunities for optimising your financial strategies. This period presents a perfect time to revisit your goals to ensure they are tracking positively, along with identifying any areas for improvement. In this blog, we will provide a recap on some of the significant changes for the 2024/25 financial year that may impact you.

Changes to Personal Income Tax

Starting 1 July 2024, the Government’s amended Stage 3 tax cuts will deliver tax relief to all Australian individual taxpayers. The revised tax rates are as follows:

*Note: These rates do not include the 2% Medicare Levy.

These changes mean that no individual with a taxable income of $135,000 or less will have a marginal tax rate exceeding 30%. The top marginal tax rate of 45% will apply to incomes above $190,000.

Changes to Contribution Limits

Effective from the 2024/25 financial year, there is an increase in the concessional (pre-tax) contribution cap. The cap has been raised from $27,500 to $30,000, allowing individuals to contribute more towards their superannuation in a tax-effective manner.

Additionally, the non-concessional (post-tax) contribution cap has been adjusted. Individuals can now contribute up to $120,000 per year as a non-concessional contribution, or up to $360,000 under the bring-forward rule. This adjustment provides an enhanced opportunity to boost superannuation savings through after-tax contributions.

Increase in Superannuation Guarantee (SG) Rate

From 1 July 2024, the employer super contribution rate has increased from 11% to 11.5%. Employers are now required to contribute more to your super fund. Be mindful of this increase if you are planning to maximise your tax-deductible contributions without breaching the concessional limits.

Higher Income Threshold for Government’s Super Co-Contribution Scheme

The income thresholds for the government’s super co-contribution scheme have been increased starting 1 July 2024. If you earn less than $45,400 or up to $60,400 in the 2024/25 financial year and make an after-tax contribution to your super, you may be eligible to receive up to $500 per year paid into your super account by the government.

Preservation Age Increase

As of 1 July 2024, the preservation age, the age at which you can access your super, has increased to 60 for everyone. This change means that the low-rate cap rule, allowing individuals between 55-60 years old to withdraw up to $235,000 at a lower tax rate (17%), is no longer available.

So, what now?

The beginning of a new financial year is an ideal time to review your circumstances and adapt your strategies to cater to new legislative changes. These changes present new opportunities for tax savings and superannuation growth. At Hewison Private Wealth, we are here to help you navigate these changes and make the most of the new opportunities.

If you have any questions or need assistance in adjusting your financial plan to align with these new regulations, please do not hesitate to contact us. We are committed to supporting you in achieving your financial goals.