Topping up your super is a great way to boost your retirement savings, but there are some limits to how much extra you can put in. If you go above these limits, you may pay extra tax, so it’s worth understanding how caps work.
Concessional (before-tax) contributions cap
Concessional contributions are payments you make before your income tax is taken out. They include the super from your employer, salary sacrificed contributions, notional taxed contributions (for Defined Benefit Division members) and any other contributions where you’ve claimed a tax deduction.
They're taxed at 15% when they enter your super fund, unless your relevant income is over $250,000 (including concessional contributions), in which case some or all are taxed at 30%.
You can generally contribute up to $25,000 each financial year this way.
Carry forward unused contributions
If you have a total super balance of less than $500,000 on 30 June of the previous financial year, you may be entitled to carry forward any unused concessional contributions under your cap on a rolling basis for five years.
The first year you will be entitled to carry forward unused amounts is the 2019–20 financial year.
Log in your account to check how you’re tracking against the cap.
What happens if you exceed the cap?
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Any contributions you make over this cap will be taxed at your marginal tax rate (less a 15% tax rebate) and you’ll incur an interest charge. If you exceed the cap, you can withdraw up to 85% of your excess contributions (for a financial year) from your super (this doesn’t apply to Defined Benefit Division [DBD] members).
Any excess concessional contributions that you leave in your super will count towards your non-concessional (after-tax) contributions cap. However, your non-concessional contributions cap will exclude any concessional contributions you withdraw from your super.
Non-concessional (after-tax) contributions cap
Non-concessional contributions are payments you make after your income tax is taken out and include after-tax contributions and spouse contributions.
Any excess concessional contributions also count towards your after-tax cap on contributions (unless you elect to release them from your fund).
You can contribute up to $100,000 per financial year this way if your total super balance at 30 June of the previous financial year is less than the general transfer balance cap (currently $1.6 million).
You might be eligible to combine up to three years in one
If you're under 65, you may be able to “bring forward” up to three years of non-concessional contributions if you go over the cap in a financial year.
The cap amount you can bring forward and whether you have a two- or three-year bring-forward period will depend on your total super balance at the end of June of the previous financial year.
The following table outlines what bring-forward entitlements apply for this financial year:
|Total super balance on 30 June 2019
||Non-concessional contributions cap for the first year
|Less than $1.4 million
|$1.4 million to less than $1.5 million
|$1.5 million to less than $1.6 million
||No bring-forward period, general non-concessional contributions cap applies
This table doesn’t apply if you’ve already triggered the bring forward rule.
Your total super balance at 30 June of the previous financial year and your non-concessional contributions cap takes into account the balances across all your super accounts, not just your UniSuper account/s.
To find out more visit the Australian Tax Office’s (ATO) website or call us on 1800 331 685.