With the end of one financial year and the beginning of a new one, it is always important to know what changes are taking place. This financial year is no different with a number of important changes occurring in 2014/15, which may affect your finances.
While the marginal tax rate remains largely unchanged in 2014/15, the federal government’s debt levy will come into place, adding an extra 2% tax for those earning $180,000 and above. This will push the top marginal tax bracket to 47% or 49% when including the Medicare levy.
The measure, which passed the Senate late last financial year, will raise around $3.2 billion which will go towards reducing the federal budget deficit.
Elsewhere, the Medicare levy will increase from 1.5% to 2.0%. The increased levy will go towards the DisablityCare Australia Fund.
From 1 July 2014, the superannuation concessional contributions cap (the contributions you can make to your super from pre-tax earnings, will increase from $25,000 to $30,000. For people aged 60 and over, the cap will increase to $35,000.
From 2015, those aged 50 and above will be able to contribute up to $35,000 per year.
Non-concessional contributions (contributions you can make from your post-tax earnings) will increase from $150,000 to $180,000.
The new financial year will also see compulsory employer contributions increase from 9.25% to 9.5%. It is set to increase steadily each year until it reaches 12% in 2022.
Removal of Stamp Duty in Victoria
As reported last month, The Victorian Government will remove stamp duty on life insurance and life insurance related policies, saving consumers $16 million over 4 years. Currently states pay a range of 3% to 11% in stamp duty for life insurance.