Contribution limits
Concessional contributionsConcessional contributions are contributions made by your employer, by you from your pre-tax salary (salary sacrifice) or contributions you have claimed a tax deduction on.
A cap per financial year applies to concessional contributions. However, a transitional limit applies (see below). A cap of $50,000 applies to the 2008/2009 financial year and $25,000 for the 2009/2010 financial year. The cap is indexed annually.
Concessional contributions are subject to 15% contribution tax in a superannuation fund, however if your concessional contributions exceed the cap in a financial year, the amount in excess of the cap is subject to additional tax at the rate of 31.5% and the ATO will seek payment of this additional tax from you personally. If such a situation arises, you will be able to request the Trustee to release money from your account to enable you to pay this additional tax.
A transitional concessional contribution cap of $100,000 per person per financial year applies in the 2008/2009 financial year and $50,000 for the financial years from 2009/2010 to 2011/2012. The transitional cap only applies to persons aged 50 or over during the relevant financial year.
Non-concessional contributionsNon-concessional contributions are contributions that you make from your after-tax salary or from another source of savings that you have already paid tax on.
A cap per financial year also applies to non-concessional contributions. If you are under age 65 you may bring forward two years of non-concessional contributions. This means that you can contribute three times the limit in one financial year but nothing in the next two years. If you are the recipient of spouse contributions then they will count towards your non-concessional cap. Government co-contributions and contributions being proceeds from certain businesses or proceeds of certain payments for personal injury may not be counted in the cap.
The non-concessional cap is currently $150,000. The non-concessional cap will always equate to six times the ongoing (indexed) concessional contributions cap.
The fund is not able to accept non-concessional contributions in excess of the non-concessional contributions cap (determined on a contribution by contribution basis) or where you have not provided your tax file number (TFN). Non-concessional contributions made in contravention of these rules must be refunded to you.
Any refund will be adjusted for investment fluctuations, reasonable costs and possible expenses such as insurance premiums.
Where you have exceeded the non-concessional contributions cap and you receive an assessment from the ATO, you must request the Trustee to release money from your account to enable you to pay this additional tax.
A summary of the above issues is set out in the table below:
| Contribution type |
What is included? |
Annual limit |
If limit is exceeded |
| Concessional contribution |
Employer contributions.
Salary sacrifice contributions. Contributions you have claimed a deduction on.
However, you must be aged 74 or less. If you are aged 65 to 74 you must meet the work test in the relevant year.## |
$50,000 for the 2008/2009 financial year and $25,000 for the 2009/2010 financial year*
However, from 1 July 2009, in any year to 30 June 2012 during which you are 50 years of age or more the limit is increased to $50,000 for that year. The limit for persons aged 50 years or more during the 2008/2009 year was $100,000.
|
You will be taxed at 31.5% on the amount of the excess.
You may apply to the Fund to have the tax liability paid to you from the Fund by completing an ATO 'release authority'. |
| Non-concessional contribution# |
Personal contributions for which you do not claim a deduction.
Spouse contributions made on your behalf.
However, you must be aged 74 or less. If you are aged 65 to 74 you must meet the work test in the relevant year.##
|
$150,000 per financial year**
However, if you are under age 65 you can bring forward 2 years of future limits averaged over a three year period. |
Excess contribution must be refunded to you.
May be adjusted to reflect investment earnings (positive or negative), fees and expenses incurred/made while the excess was in the Fund. |
* Indexed to increase with AWOTE.
** Will always be 6 times the concessional contribution limit so will increase from time to time accordingly.
# Certain amounts are excluded from this definition. For example, proceeds from the disposal of eligible small business assets or proceeds from a settlement for an injury resulting in permanent disablement. Consult your adviser of you think these may apply to you.
## You must work for 40 hours during a consecutive 30 day period in order to meet the work test.
Important NoteWe recommend that you consult with your financial adviser and/or the ATO website (www.ato.gov.au) if you think that these matters are relevant to you.