The new year is an excellent opportunity to reassess yourselves after taking a festive break with friends and family. superannuation guarantee statement means a superannuation guarantee statement under section 33. You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products). Choosing a default fund for your employees, Calculating your employees’ SG contributions? Typically, you would be in the accumulation phase while working and earning super guarantee contributions, and you would switch to the retirement phase upon retiring. Even though the server responded OK, it is possible the submission was not processed. Your employer must pay the SG if you are: 18 years old or over, and; receive $450 or more (before tax) in salary or wages in a calendar month. For example, if you earned $69,000 and $58,000 in two quarters in the current financial year (2020/21), the maximum SG payable by your employer in both quarters is capped at $5,423.55, despite the different income you received in each quarter. The super guarantee rate is currently 9.5% of ordinary earnings, which will remain in place until 2021. 1. 4.Application 5.Application of Act to Commonwealth 5A.Application of Act to Commonwealth authorities 5B.Jurisdiction etc. It is a perfect time not only to make new resolutions but also to assess your financial situation and plan for the new year. The transfer balance cap is the maximum amount of super capital which a taxpayer can transfer during their lifetime into retirement phase and thereby benefit from the earnings tax exempt relating to retirement phase. SuperGuide does not verify the information provided within comments from readers. Please contact the developer of this form processor to improve this message. For high income earners with an irregular income, this requirement may mean you may miss out on some SG. The guarantee has been frozen at 9.5% of an employee’s ordinary wages since July 2014, but as the Australian Taxation Office (ATO) explains, from July 2021 it is due to incrementally increase until it reaches 12% in July 2025. Superannuation and retirement planning information, Home / How super works / Super contributions, September 1, 2020 by Janine Mace Leave a Comment. The cap is set at $1.6 million as at 1 July 2017 and is indexed annually subject to increments of $100,000. Superannuation Guarantee (SG) Spouse contribution splitting What Are The Superannuation Contributions Caps? This Act commences on 1 July 1992. … Make sure you have the information for the right year before making decisions based on that information. The quarterly MSCB does not apply to other mandated contributions, such as super contributions you are paid under an industrial award or enterprise agreement. 12 March 2020. However, the new transfer balance cap may mean that a portion of your superannuation remains in the accumulation phase, even while you draw a super income stream. Superannuation Guarantee (SG) Spouse contribution splitting; What are the Superannuation Contributions Caps? Individuals with income from certain sources above $250,000 in 2020/21 will pay an additional 15% tax on superannuation guarantee and other concessional super contributions within the cap. If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions. Comments provided by readers that may include information relating to tax, superannuation or other rules cannot be relied upon as advice. Expect that your superannuation guarantee contributions for a financial year will exceed the concessional superannuation contributions limit. Get access to independent expert commentary on the latest super, retirement and SMSF issues, including the top performing super and pension funds, how much super is enough, the latest super rates and thresholds and new super measures and strategies. The following rates and thresholds apply to contributions and benefits, employment termination payments, super guarantee and co-contributions. Your email address will not be published. Part 1—Preliminary. You should consider whether any information on SuperGuide is appropriate to you before acting on it. But for high income earners, it’s important to know that each year the government sets a quarterly cap on the amount of an employee’s income on which their employer must make SG contributions. Note that: Your non-concessional (after-tax) cap will be zero for a financial year if you have a superannuation balance greater than or equal to the general transfer balance cap ($1.6m in 2020/21) at 30 June of the previous financial year. Phillip Coorey, Tom McIlroy. Required fields are marked *. Learn more. The MSCB for 2020/21 is $57,090 per quarter, ($228,360 per year) which equals a maximum SG contribution of $5,423.55 per quarter ($57,090 x 9.5%). Relying on the Commissioner a specified percentage of an employee ’ s chosen fund... Wages or salary SG ) contributions Commonwealth authorities 5B.Jurisdiction etc you have the information for new! Guarantee and co-contributions reduced to $ 25,000 need for this Bill has become more necessary in years... The maximum amount which can be transferred into tax-free pension status must contribute to your super fund before! And family be made as a specified percentage of an employee ’ s time! 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