1 July 2021

Changes

Company Tax Rate

Companies that are base rate entities will be subject to a corporate tax rate of 25% in the 2021–22 income year and future years. This is down from the rate of 26% that applied for the 2020–21 income year.

A base rate entity is a company that has an aggregated turnover of less than $50 million and no more than 80% of their assessable income is base rate entity passive income.

Accordingly, 2020 financial year is the last opportunity for a base rate entity to frank a distribution at the rate of 26%.

Superannuation Guarantee Charge (SGC) Rate increases

From 1 July 2021, SGC rate will increase from 9.5% to 10%. Due to the way that employee's contracts may be packaged, employers may need to consider award considerations as well as the employment contract. Renegotiation of payment arrangements under the contract may need to be considered prior to 30 June 2021.

Superannuation Contribution Caps

From 1 July 2021, tax deductible contribution cap increases from $25,000 to $27,500. Non concessional contributions will increase from $100,000 to $110,000 per year

The maximum pension cap also increases from $1.6 million to $1.7million. However, if you are currently in pension phase, you will be eligible to the full $100,000 increase.