New July 2012 Thresholds: A Superannuation Update for Employers

Marginal Income Tax Rates for Residents From 1 July, 2012

Personal Income tax rates from 1 July, 2012 will change to become:[fusion_old_table id=5 /] Above tax rates exclude Medicare Levy of 1.5%.

Flood Levy – abolished from 1 July, 2012

From 1 July 2012, the Federal Government’s special flood levy on taxable income over $50,000 will be abolished. 

Tax rates on Super Guarantee & salary sacrifice contributions

Increase in SG Contributions

Golden Handshake Tax Concession Reduction

The 15% tax break will only apply to the portion of the Golden Handshake payment that keeps total income below $180,000. Amounts above $180,000 are now taxed at marginal rates.

 FOOTNOTES TO THRESHOLDS:
# income for the purposes of tax on SG and salary sacrifice contributions for high income earners is defined by the ATO as “taxable income, concessional superannuation contributions, adjusted fringe benefits, total net investment loss, target foreign income, tax-free government pensions and benefits less child support.” Some transitional tax arrangements exist for those who exceed the $300,000 threshold as a result of their concessional contributions being taken into account.

* Contribution tax deducted, then refunded to the super fund by the ATO.

## Income is assessable income plus reportable fringe benefits and includes any salary sacrifice contributions (Note: there has been no indexation from the 2011/2012 financial year).

** These amounts are not classified as ETPs and hence cannot be rolled over into super.

*** The employee must monitor adherence to their concessional contributions cap. Payments on excess contributions are taxed at the rate of 30% PLUS Medicare Levy and may have a tax impact on any other after tax contributions you may have made. The cap will begin to be exceeded at assessable income levels greater than $277,778.

^ If non-concessional contributions are made over the age of 65, the person must have been in paid employment for 40 hours in any 30 day period during the financial year in which the contribution was made.

^^ Individuals under 65 years of age during the financial year ended 30 June in which a contribution is made can bring forward future entitlements up to an amount equal to three (3) times the non-concessional contribution cap, which for the 2012/13 financial year is equal to 3 times $150,000 = $450,000. No non-concessional contribution can then be made over the ensuing two (2) financial years. For contributions beyond age 65, see ^ footnote above.

To discuss any aspect relating to this information or to your company super fund, please contact Mario Isaias, Noel Hucker or Inbam Devadason at Harvest Financial Group on (02) 8908-4300.

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