On the 28th of February 2023, the Australian Government announced it will introduce a 30% tax rate to super earnings on member balances above $3m. This means those affected would retain the current 15% tax rate on earnings below the $3m threshold but will pay an extra 30% tax on future earnings for balances over $3m. It is also proposed that the measure will not impose a limit on super account balances in the accumulation phase, rather it is about how generous the tax concessions are on higher balances.
The measure is expected to impact around 80,000 people (or 0.5% of people with super accounts) but will generate $2 billion in revenue in its first full year and $3.2 billion over five years. The Government has confirmed the changes will not be applied retrospectively and will apply to future earnings, coming into effect after the 2025 federal election with a start date of 1 July 2025, but plans on legislating the change as soon as practicable.
For further information, please read the press release below from the federal treasurer.
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