Australia: Key Superannuation Rates And Thresholds

Last Updated: 13 July 2009

We thought the following summary of the key rates and thresholds that apply in relation to superannuation contributions and benefits, employment termination payments, superannuation guarantee and co-contributions effective from 1 July 2009 would be of assistance.

Key budget changes

  • a reduction of the concessional superannuation contributions cap from $50,000 to $25,000 (indexed);
  • a reduction of the transitional concessional contributions cap from $100,000 to $50,000 (not indexed) for those aged 50 years and over for 2009-10 to 2011-12 financial years; and
  • the continuation of the existing pension draw down relief to 2009-10.

Superannuation guarantee

The superannuation guarantee requires employers to provide sufficient superannuation support for their employees. You are obliged to contribute a minimum of 9% of an eligible employee's OTE to a complying superannuation fund or retirement savings account (RSA). Your contributions need to be made at least every quarter.

The maximum superannuation contribution base is used to determine the maximum limit on any individual employee's earnings base for each quarter of any financial year. You do not have to provide the minimum support for the part of earnings above this limit.

Income year Per quarter
2009-10 $40,170
2008-09 $38,180
2007-08 $36,470

ETP cap amount

An employment termination payment (ETP) is a payment made in consequence of the termination of employment. It can include:

  • amounts for unused rostered days off
  • amounts in lieu of notice
  • a gratuity or 'golden handshake'
  • an employee's invalidity payment (for permanent disability, other than compensation for personal injury)
  • certain payments after the death of an employee.

Employment termination payments do not include:

  • a payment for unused annual leave or unused long service leave
  • the tax-free part of a genuine redundancy payment or an early retirement scheme payment.

The amount up to the ETP cap amount will be taxed at a concessional rate. The amount in excess of the ETP cap amount will be taxed at the top marginal rate.

ETP cap amount for life benefit termination payments

Income year Amount
2009-10 $150,000
2008-09 $145,000
2007-08 $140,000

Tax-free part of genuine redundancy payments and early retirement scheme payments

Income year Base limit For each complete year of service
2009-10 $7,732 $3,867
2008-09 $7,350 $3,676
2007-08 $7,020 $3,511

Transitional ETP cap amounts up to 30 June 2012

Transitional arrangements apply if you were entitled, as at 9 May 2006, to a payment made on the termination of employment under:

  • a written contract
  • an Australian or foreign law (or an instrument under such a law)
  • a workplace agreement under the Workplace Relations Act 1996.

Employment termination payments made after 1 July 2007 (other than those made under the transitional arrangements) cannot be rolled over into superannuation.

Age of receipt Tax free component Taxable component
0 to preservation age Tax free 30% - $0 to $1,000,000
    45% - $1,000,001 +
Preservation age and over Tax free 15% - $0 to $150,000
    30% - $150,001 to $1,000,000
    45% - $1,000,001 +

plus Medicare levy as applicable

Unused annual leave

  Normal termination or retirement Genuine redundancy, early retirement scheme or invalidity segment of ETP
To 17 August 1993 Fully assessable - 30% Fully assessable - 30%
18 August 1993 + Fully assessable – marginal tax rate Fully assessable - 30%

plus Medicare levy as applicable

Unused long service leave

  Normal termination or retirement Genuine redundancy, early retirement scheme or invalidity segment of ETP
To 15 August 1978 5% assessable – marginal tax rate 5% assessable – marginal tax rate
16 August 1978 to 17 August 1993 Fully assessable – 30% Fully assessable - 30%
18 August 1993 + Fully assessable – marginal tax rate Fully assessable - 30%

Preservation Age

Generally, you must reach preservation age and trigger a condition of release before you can access your superannuation.

Date of birth Preservation age
Before 1 July 1960 55
1 July 1960 – 30 June 1961 56
1 July 1961 – 30 June 1962 57
1 July 1962 – 30 June 1963 58
1 July 1963 – 30 June 1964 59
From 1 July 1964 60

Minimum Pension Drawdown

From 1 July 2009, the Government will halve the minimum amounts self-funded retirees have to draw down from their account-based pensions for 2009-10.

This extends the drawdown relief provided by the Government for 2008-09, recognising the impact of the global recession.

Age Minimum % withdrawal from 1 July 2007 – 30 June 2008 Minimum % withdrawal from 1 July 2008 – 30 June 2009 Minimum % withdrawal from 1 July 2009 – 30 June 2010
Under 65 4% 2% 2%
65-74 5% 2.5% 2.5%
75-79 6% 3% 3%
80-84 7% 3.5% 3.5%
85-89 9% 4.5% 4.5%
90-94 11% 5.5% 5.5%
95 or more 14% 7% 7%

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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