What's that threshold from 1 July 2025

What’s that threshold from 1 July 2025

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The new financial year has just started with routine indexation, advisers often have questions around some of the key superannuation and tax related thresholds which are relevant to financial planning. In this FAQ, we outline some of the key super and tax thresholds from 1 July 2025 which may be helpful with your discussions with clients.

Please note, you can access a much more comprehensive list of relevant thresholds, including social security and aged care in our Fast Facts.

2025-26 FINANCIAL YEAR

Type

Additional Information

Individual resident tax rates (excluding Medicare Levy)

Taxable income	Tax rate
$0 - $18,200	Nil
$18,201 - $45,000	16%
$45,001 - $135,000	30%
$135,001 - $190,000	37%
$190,001 and over	45%

There was no change to the individual tax rates in 2025–26.

Worth noting, the 16% tax rate will change to 15% in 2026–27 and will further reduce to 14% from 2027–28 onwards.

Seniors and Pensioner Tax Offset (SAPTO)

Taxable income	Tax rate
Single	$34,919
Partnered, non-illness separated	$30,994
Partnered, illness separated	$33,732

While there are many reasons to lodge a tax return, these thresholds also impact whether older clients are required to lodge a tax return.

Effective tax-free threshold

Taxable	Tax rate
Not eligible for SAPTO / LITO	$18,200
Eligible for LITO	$22,575
SAPTO and LITO (single)	$35,813
SAPTO and LITO (partnered, not illness separated)	$31,888
SAPTO and LITO (partnered, illness separated)	$34,625

Thresholds at which neither personal income tax nor Medicare Levy applies due to LITO and SAPTO.

May be relevant when assessing personal deductible super contributions and salary sacrifice arrangements in considering the levels of income at which no personal income tax applies.

Non-concessional contributions (NCC) cap

$120,000 annual cap or up to $360,000 under the bring-forward rules

Contributions can be made until 28 days after the month the client turns 75. No work test applies.

Subject to prior contributions, eligible to use the bring-forward provisions if 74 or younger at the start of the FY and if total superannuation balance (TSB) on 30 June 2025 is:

TSB	NCC
< $1.76 million	$360,000
$1.76 million to < $1.88 million	$240,000
$1.88 million to < $2 million	$120,000
≥ $2 million	Nil

Concessional contributions (CC) cap

$30,000

Work test applies to personal deductible contributions if aged 67 or over at the time of contribution, unless a one-off work test exemption applies for those with TSB less than $300,000 on 30 June 2025 and who met the work test in 2024-25. Work test can be met after making the contribution within the same FY.

The cap may be higher if the client has unused CC cap from 1 July 2019 and their TSB is less than $500,000 on 30 June 2025.

The 2024-25 FY was the last FY to utilise any unused CC cap space in the 2019-20 FY as unused amounts can only be carried

Transfer balance cap

$2 million

The transfer balance cap applicable to the client depends on whether they have held a retirement phase income stream since 1 July 2017. Clients commencing retirement phase income streams for the first time since 1 July 2025 will have a transfer balance cap of $2 million.

Proportional indexation rules apply based on personal transfer balance cap and unused amounts for those who held a retirement phase income stream since 1 July 2017.

Preservation age

Preservation is a key concept relating to accessing superannuation, commencing Transition to Retirement income streams and taxation of super lump sums and employment termination payments.

Superannuation Guarantee (SG)

12%

With 0.5% higher SG compared to 2024-25, employee client’s CC may need to be reviewed.

Maximum contribution base

$62,500 per quarter

This is the 1st year that the maximum contribution base has reduced compared to the previous FY. This is to ensure that mandatory 12% SG contributions on income does not exceed the annual CC cap.

When the annual CC cap increases in the future, so will the maximum contribution base.

Government co-contribution

Maximum entitlement of $500
Lower income threshold – $47,488
Higher income threshold – $62,488

Small Business CGT Cap

$1.865 million

If eligible for the 15-year exemption, up to $1.865 million of the proceeds can be contributed under the CGT Cap.

If eligible for retirement exemption, only the amount disregarded under the retirement exemption to a maximum lifetime limit of $500,000 can be contributed under the CGT Cap.

Life and death benefit termination cap

$260,000

Applies to eligible employer-related termination payments.

Genuine redundancy and early retirement scheme

Base: $13,100
Each completed year of service: $6,552

Amongst other criteria, client needs to be under Age Pension age at the point of dismissal.

Untaxed plan cap

$1.865 million

Applies to lump sum withdrawals and rollovers from untaxed funds such as certain public sector super schemes.

Medicare levy surcharge

Rate	Singles	Families
0%	≤ $101,000	≤ $202,000
1%	$101,001 – $118,000	$202,001 – $236,000
1.25%	$118,001 – $158,000	$236,001 – $316,000
1.5%	≥ $158,001	≥ $316,001

Eligible income impacts liability for the Medicare Levy Surcharge if the individual does not hold private health insurance, and it affects the amount of rebate.

Super income stream minimums

Under 65 – 4%
65–74 – 5%
75–79 – 6%
80–84 – 7%
85–89 – 9%
90–94 – 11%
95+ – 14%