Australia’s annual concessional contributions cap is to be reduced to A$25,000 ($18,590.50) for all employees effective July 1, 2017, the Australian Taxation Office said May 31 in a press release regarding superannuation changes.
Under current rules, concessional contributions are capped at A$35,000 ($26,026.70) for employees at least 49 years old at the end of the previous financial year and A$30,000 ($22,308.60) for all other employees.
Employees are to be able to carry-forward any unused amount of the concessional contributions cap effective July 1, 2018. Unused concessional contributions are to remain available on a rolling basis for five years then expire, the Australian Taxation Office said.
Employees no longer would be able to claim deductions for personal contributions made to constitutionally protected funds, other funds that exclude contributions from their taxable income, and certain other defined-benefit funds effective July 1, 2017. Employees wanting to claim a deduction can choose to make a personal super contribution to another eligible super fund.
The 10 percent maximum earnings condition no longer is to require that less than 10 percent of an employee’s income be from salary and wages to claim a deduction for personal super contributions effective July 1, 2017. All employees younger than 75 would be eligible to claim tax deductions for personal super contributions, subject to the concessional cap.
Employers’ minimum contribution rate continues to be 9.5 percent.
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The Australian Release regarding superannuation changes can be found at https://www.ato.gov.au/Individuals/Super/Super-changes/.
More information on payroll issues in Australia may be found in the Australia country primer.
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