Super housekeeping tips for EOFY

It’s also a good idea to confirm with your employer or payroll person when they will be making their electronic contributions (such as salary sacrifice and SG) to your super fund, so you know whether they will hit your super account by 30 June. As your employer is not required to make SG contributions for the April to June quarter until 28 July, don’t automatically assume they will make the contribution this financial year.

You may be eligible to contribute more than your normal concessional contribution cap if you have unused cap amounts accrued from prior years – known as carry forward of concessional contributions. If you’re eligible, 2023–24 is your last chance to use any amount from 2018–19 before it expires. The last year to take advantage of any unused cap space from 2019–20 is 2024–25.

The bring-forward measure (not to be confused with the carry-forward rule mentioned above) can also be used to contribute more than the standard annual non-concessional cap.

If you discover you have breached a cap or will do so before the end of the year due to contributions that are scheduled to be paid by your employer, don’t panic. The consequences for exceeding caps are only intended to put you in the same position you would have been if the excessive contributions were not made.

2. Get your contributions in before 30 June

If you want to have a super contribution counted in the current financial year, ensure your super fund receives it by 30 June. This is particularly important if you plan to claim a tax deduction for contributions (see tip 3), or if you are making a non-concessional contribution to qualify for a government co-contribution for the year (see tip 4).

The key date for making contributions is not when you make the payment, but when it’s received by your super fund. Even though many banks and financial institutions now offer instant payments, electronic fund transfers and BPAY can take days to appear in your super account, so make sure you send off your payment well ahead of the deadline.

3. Consider making a tax-deductible super contribution

If you have space in your concessional contribution cap, consider making a personal tax-deductible contribution into your super account using some of your savings.

Although your contribution will be taxed 15% as it enters your super account (or up to 30% if your income plus your concessional super contributions is $250,000 or more), this is likely to be lower than your marginal tax rate and you could enjoy a significant tax saving.

This type of contribution is considered a concessional (before-tax) contribution and counts towards your annual concessional contributions cap.

4. Consider making a non-concessional contribution

Non-concessional (after-tax) contributions are made from money you have already paid tax on and can be a great way to boost your super if you have spare cash available. This type of contribution is not taxed as it enters your super account.

Non-concessional contributions can make sense if you’ve already reached your concessional contributions cap. You pay a maximum of 15% tax on your investment earnings on money invested in super, which is usually less than you would pay outside the super system, so it can be an attractive option for savings you don’t need to access until retirement.

If you’re a lower income earner, you may also receive a co-contribution from the government in return for making a non-concessional contribution. Those with income below $58,445 in 2023–24 or $60,400 in 2024–25 could qualify for a payment.

If your children have recently joined the workforce, encouraging them to take advantage of the co-contribution, or even providing them with the means to do so, will set them on the right path for successful retirement saving.

5. Employers: Get ready for a new super guarantee (SG) rate

A new financial year brings a higher rate of SG contribution for your employees. The rate is rising 0.5% each year until the maximum of 12% comes in on 1 July 2025.

Your payroll software should make the change automatically, but it is worth confirming and adjusting your budget for the increased expense.

In 2023–24 the SG rate is 11%, and for 2024–25 it is 11.5%. From 1 July 2025, the rate will be 12%, where it is scheduled to stay.

6. Boost your spouse’s super balance

If you and your spouse have unequal balances in your super accounts and/or you are the higher earner, consider submitting a request to split some of your super contribution with your spouse to even them up. (Spouse here refers to married and de facto couples). You may also want to transfer contributions from your account to your spouse’s for other reasons – perhaps they are older than you and will be able to access the money sooner. Alternatively, you may wish to hold more super in the younger spouse’s name to improve the rate of Age Pension the older spouse is eligible for.

Requests to split need to be made by 30 June of the financial year following the year the contributions were made, so you can split some of your super contributions from last financial year if you lodge a request with your super fund by 30 June.

If your spouse has an adjusted taxable income below $40,000, you could also consider contributing to their super account to boost their retirement savings and earn yourself a tax rebate.

Eligible contributions into your spouse’s super account of up to $3,000 will provide you with a tax offset of up to $540.

7. Get your salary-sacrifice arrangement ready

Now is the time to start thinking about putting a salary-sacrifice arrangement in place for next financial year. Salary sacrifice is an arrangement where part of your before-tax salary is paid into your super account rather than being paid to you as take-home pay. This can be a tax-effective way to boost your retirement savings.

To be valid, a salary-sacrifice arrangement needs to be set up before you have earned the income you wish to sacrifice. If you are usually paid after you complete the work (in arrears), it may take a pay period for a new salary-sacrifice arrangement to take effect, as you have already earned some of the income you haven’t been paid for yet.

If you haven’t made changes in time to affect your first pay for the financial year, don’t be concerned. You can modify a salary-sacrifice arrangement at any time, keeping in mind that it may take a pay cycle to come into effect.

8. Confirm your super income stream payments

If you are in the retirement phase and are receiving a super pension, check you have received at least the required minimum pension or transition-to-retirement income stream payment amount during the financial year.

If you have an SMSF it is up to you (and the other trustees) to ensure the minimum payment standards are met, as underpayment can lead to compliance problems.

If your super is with a large fund, your super provider will take care of ensuring minimums are met.

After 1 July, your minimum for the new financial year will be determined, and this may be significantly different from your current minimum, especially if you’ve had a milestone birthday.