Understanding personal tax rates is crucial for financial planning. Here’s a quick breakdown:
- $0 – $18,200: Tax-free
- $18,201 – $45,000: 19c per $1 over $18,200
- $45,001 – $120,000: $5,092 + 32.5c per $1 over $45,000
- $120,001 – $180,000: $29,467 + 37c per $1 over $120,000
- $180,001+: $51,667 + 45c per $1 over $180,000
Superannuation Guarantee (SG)
- SG rate for 2023/24: 11% of Ordinary Time Earnings (OTE)
- Legislated increase: Rising to 12% by 2025
- Maximum contribution base: $62,270 per quarter
Contribution Caps
- Concessional cap: $27,500 per year (carry-forward rules may apply)
- Non-concessional cap: $110,000 per year
- Bring-forward rule: Up to $330,000 over three years (if eligible)
- CGT lifetime cap: $1.705 million
- Downsizer contribution: $300,000 (for those 55 and over)
Super Taxation
- Concessional contributions: Taxed at 15% (or 30% if income exceeds $250,000)
- Excess concessional contributions: Taxed at marginal rate minus 15% offset
- Non-concessional contributions: Not taxed on entry
- Excess non-concessional contributions: Taxed at 47% if not withdrawn
Medicare Levy and Surcharge
- Medicare levy: 2% of taxable income
- Exemptions: Income thresholds apply
- Medicare levy surcharge: 1% – 1.5% for high-income earners without private hospital cover
Superannuation Benefits Taxation
- Lump sum withdrawals:
- Tax-free if aged 60+
- Taxable component (under preservation age): 20% + Medicare levy
- Low-rate cap: $235,000 at 0% tax for those aged 55–59
- Income streams:
- Tax-free for individuals aged 60+
- Marginal tax rate (with offsets) for those under 60
Government Contributions
- Co-contribution: Up to $500 if earning under $43,445
- Low-income super tax offset: Up to $500 for incomes below $37,000
- Spouse contribution tax offset: Up to $540 for contributions to a low-income spouse
Defined Benefit Pensions
- Income cap: $118,750 per year (excess subject to tax)
- Tax-free after 60 up to the cap
- Taxed at marginal rate with offsets if under 60
Minimum Pension Drawdowns
- Under 65: 4%
- 65–74: 5%
- 75–79: 6%
- 80+: Increasing with age up to 14%
Final Thoughts
Understanding superannuation, tax rates, and government incentives is crucial for optimising retirement savings. Regularly reviewing these factors ensures individuals make the most of available benefits and concessions. Seek professional advice for tailored strategies.