There are limits that restrict the amount you can contribute to super in any particular year before incurring additional tax. These limits apply to both concessional (before-tax) contributions and non-concessional (after-tax) contributions.
What are concessional contributions?
These contributions are made before tax is taken out of your salary. They include Super Guarantee (SG) contributions made by employers* and salary sacrifice contributions. Concessional contributions are taxed at a lower 'concessional' rate of 15%. If your employer subsidises any administration costs or pays insurance premiums on your behalf, these amounts also count towards your concessional contribution limit.
What are non-concessional contributions?
These contributions are deducted from your salary after your income tax has been calculated. They include any one-off contributions you make to your super from your bank account.
What is the work test?
To make a super contribution you must be under age 65, or if you are between 65 and 74, you need to meet a ‘work test’ of 40 hours gainful employment within a 30- day period in the financial year in which you contribute. Members over the age of 75 may not make contributions.
What happens if I go over my limit?
If your contributions are over your limit, you will be liable to pay more tax. Only the amount above the relevant limit is charged this additional tax. For example, if you contributed $5,000 more than the limit, extra tax would be charged on this $5,000.
Any concessional contributions which exceed the limit will be taxed at your marginal tax rate, plus Medicare, plus an interest charge. Excess concessional contributions will also be counted towards your non-concessional contribution limit. Any non-concessional contributions which exceed the limit will be taxed at the highest marginal rate.
It's up to you to monitor your contributions. It’s also important to remember that the limits are flat, so if you are contributing to more than one super fund you still have the one set of limits to adhere to.
Of course, if you’re happy to pay the additional tax, a choice to contribute more than the limit is up to you.
How can I keep track of my contributinos?
You can monitor your contributions via Member Online. It is important not to use your payslip to track these contributions. For example, a contribution deducted from your pay in June may not arrive in your VISSF account until July, which is in a different financial year.
To track your contributions, visit www.vissf.com.au and login to Member Online. Then click on Your Account tab followed by Transaction History. You can see this financial year's:
- amounts contributed by your employer
- salary sacrifice contributions, and
- other concessional amounts.
You can also see totals for the previous year.
You will need to monitor your non- concessional contributions yourself. Alternatively, you can call our Client Services Team to find out how much you have contributed if you’re unsure.
What are the limits for 2015/2016 financial year?
|Concessional contributions||Non-concessional contributions|
|Under 49 - Limited to $30,000 a year. Over 49 - Limited to $35,000 a year.||Limited to $180,000 a year.|
|Concessional contributions include both employer and salary sacrifice contributions. Any contributions in excess of this limit will be taxed at the individual's marginal rate, plus Medicare, plus an interest charge. These contributions will also be counted towards your non-concessional contribution limit.||If you're aged under 65 you can bring forward two years of contributions giving you a total non-concessional cap of $540,000 for the three years. Where a 'bring forward' has been triggered, the two future years' entitlement are not indexed. For example, a person under age 65 will be able to make up to $540,000 of contributions in the 2015/16 financial year but will then be unable to make further non- concessional contributions until the 2017/18 financial year without exceeding the limit. Any contributions made in excess of this limit will be taxed at 47%|
Discover the difference expert advice can make to your super and retirement options.
As a VISSF member, you can now access an extensive range of advice services. A qualified financial planner from our Advice Team can help you answer single questions like:
- Do I have enough money to retire?
- How much money do I need to retire?
- How long will my money last?
- Which investment option is right for me?
- Should I salary sacrifice?
- Should I consolidate my super? How?
- Do I have enough insurance cover to protect myself and my family?
You can also access simple retirement planning advice from VISSF, including advice about:
- Effective contribution strategies
- How to work less and access your super to top up your income
- How to convert your super into a regular income stream
And if you need more comprehensive financial advice, the VISSF Advice Team can arrange a face-to-face meeting with a financial planner. The first meeting is complimentary.
Call 1300 660 027 to take advantage of our new financial advice services for members.
Have any questions?
Call us: 1300 660 027
This fact sheet is issued by the Trustee of The Victorian Independent Schools Superannuation Fund (ABN 37 024 873 660, RSE Registration number R1000436, MySuper Authorisation 37024873660599) VIS Nominees Pty Ltd (ABN 11 006 586 367 Australian Financial Services Licence number 235097. Registrable Superannuation Entity Licence number L0000321). It contains general advice only. In preparing this fact sheet, the Trustee has not taken into account your objectives, financial circumstances or needs. Before making any financial decisions, you should consider your personal circumstances and seek appropriate independent advice. The individual case study samples are for illustrative purposes only.