From 1 July 2017 to 30 June 2021, the concessional contribution cap for each year is $25,000. Your cap may be higher if you did not use the full amount of your cap in earlier years. This is called the carry forward of unused concessional contributions.
If you choose to leave the excess concessional contributions in super, you need to pay any extra tax and the ECC charge out of your own money. Individuals who make contributions on or after 1 July 2021 that exceed their cap, will no longer be liable to pay the ECC charge.
There is a limit to the amount you can contribute to super from your before-tax income in order to benefit from the concessional tax rate. The cap – which includes contributions made by your employer under the Super Guarantee scheme – is set at $27,500 p.a. (2023/24 figure).
What is the concessional contributions cap? For 2023/24, the concessional contribution cap is $27,500 per year. This covers all before-tax contributions - employer super payments, salary sacrifice and the personal contributions you claim as a tax deduction.
If you exceed your annual concessional contributions cap, the ATO will notify you. Your excess contributions are then included in your assessable income, meaning they are taxed at your marginal tax rate, minus a 15 per cent tax offset to reflect the contributions tax you paid when the money entered your account.
If you transfer more than $1.9 million, you'll generally be liable to pay 15% tax (or up to 30% tax if you've gone over before) from the day you go over the transfer balance cap. You'll have to take the excess money out of your pension account; your options for doing this depend on the type of account you have.
You may be able to seek an extension from the ATO. How much can I contribute? The maximum you can contribute is $300,000 or the sale price of your home, whichever is less. You may make more than one contribution, but the total must not exceed this maximum.
The excess non-concessional contributions will be taxed at the highest marginal tax rate plus Medicare levy. issue your super fund with a release authority to pay the ENCC tax liability amount to us within 10 business days.
From 1 July 2021, the concessional contributions cap is $27,500. The increase is a result of indexation in line with average weekly ordinary time earnings (AWOTE). From 1 July 2017 to 30 June 2021, the concessional contribution cap for each year is $25,000.
You can generally contribute up to $27,500 each financial year. These contributions are taxed at 15%. If you earn over $250,000, you may pay an extra 15% tax—so in total, you'll pay 30% tax on some or all of the contributions.
From 1 July 2023, the superannuation guarantee rate will increase from 10.5% to 11%. Employers should update payroll systems to ensure the correct amounts of superannuation are paid to all eligible employees from 1 July 2023.
The ASFA Retirement Standard Explainer says a comfortable retirement lifestyle would need $640,000 in super for a couple, or $545,000 for a single person.
You can make an after-tax contribution to your super from your take home pay. These are called non-concessional contributions. You can contribute up to $110,000 each year in non-concessional contributions.
Withdrawing some of your super early is a big financial decision that you shouldn't make lightly. It could leave you with less money for your retirement and impact your insurance within super. So before applying, stop and think about the potential consequences of accessing your superannuation early.
If you exceed the cap, you are liable to pay tax on the excess transfer balance earnings (excess transfer balance tax). You also need to transfer any excess to a super accumulation account or withdraw it as a lump sum. This is called a commutation.
Assume, for example, you will need 65 per cent of your pre-retirement income, so if you earn $50,000 now, you might need $32,500 in retirement.
Super is a great way to save money for your retirement. It is generally taxed at a lower rate than your regular income. You typically pay 15% tax on your super contributions, and your withdrawals are tax-free if you're 60 or older. The investment earnings on your super are also only taxed at 15%.
Individuals aged between 67 and 74 who have recently retired, may be eligible to make additional voluntary contributions to super where they meet certain eligibility criteria around their previous year of work and their total super balance.
The only way to avoid paying super contributions tax is to make a non-concessional contribution instead of a concessional contribution. Sure, you don't get to claim a tax deduction for non-concessional contributions, but you won't need to pay contributions tax either.
If you leave the excess contributions in your super account, they will be counted towards your annual non-concessional contributions cap. When you exceed your concessional contributions cap and have to pay tax, the ATO recognises you have already paid 15% tax on the contributions and gives you a tax offset.
If you meet all the eligibility criteria, the bring-forward rules allow you to make non-concessional contributions of up to three times the annual general non-concessional contributions cap in a single year (3 x $110,000 = $330,000 in 2023–24).
If you're single, you'll need more than $500,000, assuming you own your own home, according to the Association of Superannuation Funds of Australia Retirement Standard.
Your principal place of residence is regarded as an 'exempt asset'. However this doesn't mean that you can do anything you like with your home and your pension entitlements will stay the same. Your pension may be affected if: there is a change in the way you own property.
By adding to super from your before-tax salary, you could reduce your taxable income and reduce your tax bill, while growing your retirement savings. Take a look at the benefits, caps and how to salary sacrifice.