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1st July marks a new financial year and as a result of the Federal Budget a few things will be changing for 2014/15. Here’s a look at how salary packaging will be impacted:

Superannuation

There are caps on the amount you can pay to your superannuation fund each year through concessional (pre-tax) contributions. This year the superannuation concessional contributions cap will increase to $35,000 for employees aged 50 and over and to $30,000 for those under 50 years of age. This means up to an extra $10,000 allowance for superannuation packaging compared to last year.

Super egg purpleSo the caps for the 2014/15 financial year are:

General cap: $30,000

Cap for those 50 years old or over: $35,000

 

 

You can read more about the concessional contribution caps on the ATO website.

Medicare levy increase 

From 1 July 2014 the personal Medicare levy on taxable income rose from 1.5% to 2.0%. This will actually slightly increase the after-tax savings achieved through salary packaging.  For every $1,000 in benefit costs an employee salary packages (i.e. pays for with pre-tax salary) they will now save an additional $5.

So, it’s good news for salary packaging – everyone can increase the amount they salary sacrifice into their super fund and the extra o.5% Medicare levy increases salary packaging savings!
As always, if you have any questions surrounding salary packaging leave us a comment below and we’ll get back to you!

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