Boost Your Retirement Savings: New Superannuation Contribution Limits for Aussies Abroad Starting July 2024

Starting July 1, 2024, there will be some changes to how much Australians living abroad can contribute to their retirement savings (superannuation).

The government adjusts the limits on superannuation contributions each year based on wage growth in Australia. The latest wage data means the contribution limits will increase from July 1, 2024:

The yearly limit on pre-tax (concessional) contributions will go up from $27,500 to $30,000.

The yearly limit on after-tax (non-concessional) contributions will increase from $110,000 to $120,000.

There are also special rules that allow people to contribute more than the normal limits in certain situations:

The “carry forward” rule lets you use up unused concessional cap space from previous years, up to a total of $162,500 per year (increased from $157,500).

The “bring forward” rule allows you to make up to 3 years’ worth of non-concessional contributions at once, up to $360,000 (increased from $330,000).

These changes open up new opportunities for Australians living abroad to save more for retirement and potentially reduce their Australian tax. However, the rules can be quite complex, so it’s a good idea to speak to a financial advisor to understand how they apply to your specific situation.

Concessional Contributions:

These are the contributions you make to your super fund before tax is taken out.

The money goes into your super account before it gets taxed, so it helps reduce your taxable income.

The main types of concessional contributions are:

Employer contributions (like the superannuation guarantee)

Salary sacrifice contributions you choose to make from your pre-tax pay

Personal contributions you claim a tax deduction for

Non-Concessional Contributions:

These are the contributions you make to your super fund from your after-tax income.

The money has already been taxed before it goes into your super account.

The main types of non-concessional contributions are:

Personal contributions you make from your take-home pay

Contributions your spouse makes to your super account

The key differences are:

• Concessional contributions reduce your taxable income, non-concessional do not.
• Concessional contributions are taxed at 15% when they go into your super fund, non-concessional contributions are not taxed again.
• There are annual limits on how much you can contribute concessionally ($27,500 in 2023/24) and non-concessionally ($110,000 in 2023/24).

If you have any questions about how these superannuation changes might affect you, feel free to get in touch and we’ll be happy to discuss it further.