With the start of the new financial year behind us, it’s important to be aware of a few important changes that took affect from 1 July 2021 that may impact you.
Many superannuation thresholds have increased since the start of the financial year, including the rate of superannuation guarantee which now sits at 10.0%. This means your employer is required to place additional money into your superannuation fund.
If you were close to your concessional contribution cap last financial year, then you need to be aware of this change. Your concessional contributions include employer contributions (including super guarantee), salary sacrificed contributions and any personal deductible contributions to super). There is an annual cap that applies to these contributions, which is $27,500 in total (it was $25,000 last financial year), so the increase in super guarantee should be covered by this increase in the concessional cap provided nothing else has changed.
However, you should also be aware that some employers may take superannuation guarantee amounts out of a total employment package they provide you, which means your take home pay could have reduced as a result. Whilst the reduction may only be small, if you have noticed a change in your after-tax pay, this could explain the difference.
A number of other superannuation thresholds changed on 1 July 2021, and this may provide you with more opportunities to maximise your use of the superannuation environment and fund a better retirement in the future. To see what your option are, talk to your Nexia financial adviser.
In Australia, inflation overshot the Reserve Bank’s inflation target band for the first time in a decade in the June quarter, but this was largely due to the unwinding of pandemic-related price reductions. Minutes from the RBA’s July meeting were released during the month, with the RBA announcing it will begin tapering bond purchases under its quantitative easing program from September.
It also revealed that the RBA will keep the yield control curve pegged to the April 2024 bond. The cash rate was left unchanged.