Reminder of superannuation caps indexation for 2022
From 1 July 2021, the superannuation contributions caps have been indexed for the 2022 income year.
The new concessional contributions cap for the 2022 financial year is now $27,500 (increased from $25,000).
The new non-concessional (i.e., non-deductible) contributions cap for the 2022 financial year is now $110,000 or (where the ‘bring forward’ rules are applicable) $330,000 over three years (increased from $100,000 or $300,000 respectively).
The CGT cap amount for the 2022 financial year is now $1,615,000 (increased from $1,565,000).
The increase in the concessional contributions cap in particular will require those salary sacrificing additional superannuation to consider if they wish to increase their packaging arrangements so as to maximise the $2,500 increase in the cap.
Maximum contributions base for super guarantee
The maximum super contributions base is used to determine the limit on any individual employee’s earnings base for superannuation guarantee purposes on a quarterly basis.
Employers do not have to provide the minimum quarterly support for earnings above this limit.
For the 2022 financial year, the maximum contributions base has increased to $58,920 (up from $57,090).
This means once an employee earns over $235,680 during the 2022 income year, no additional superannuation guarantee will generally be required to be paid by an employer.
Practically, this means that the maximum superannuation guarantee contribution that an employer must pay for the 2022 income year is 10% of $235,680 (or $23,568).
Superannuation is one of those areas that can be compared to a cart on a rollercoaster. Performance is constantly affected by economic climate and shifting legislation that alters the benefits individuals and businesses can gain from superannuation funds.
Please contact us if you would like to find out specifically how any changes to superannuation will affect you this financial year.