Limiting Superannuation Tax Concessions
For those with a superannuation balance exceeding $3 million, the Government is reducing superannuation earnings tax concessions.
From 1 July 2025, earnings on balances exceeding $3 million will be taxed at 30% instead of the concessional 15%. Under the current proposal:
Earnings on balances below $3million will continue to be taxed at the concessional rate of 15%.
Aligning Super Guarantee with Take Home Pay
With the aim of providing better retirement outcomes for employees, the Government will introduce legislation requiring employers to pay super on payday from 1 July 2026.
Currently employers are required to pay the Super Guarantee on at least a quarterly basis. This timing will be changed so employers will be required to pay superannuation on the same day as payday.
This will require a cashflow adjustment for businesses to allow for this change. The government anticipates that more frequent super payments will make employers payroll management smoother with fewer liabilities building up on their books.
For employees, receiving their superannuation guarantee contributions earlier and more frequently throughout their working life with result in higher retirement savings.
Clarifying Non-Arm’s Length Income
The non-arm’s length income (NALI) provisions will be amended to provide greater certainty to taxpayers. The concept of NALE (Non-Arm's Length Expenditure) created many problems when the definition of NALI was amended in 2019. A consequence included the 'tainting' of some, or all, income in the superfund as NALI that is then taxed at 47% instead of the concessional rate of 15%.
To address the above and other issues, NALI provisions will be amended to:
The date of effect is currently unknown.
Contact your WDF team member if you would like to discuss how the changes announced in the budget might impact your superannuation. Phone 02 6921 5444 or email accountants@wdf.com.au
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