Contribution into superannuation can be divided into two parts, Concessional contributions and Non-concessional contributions.
Concessional contributions are made into your superannuation account before tax which includes:
- Employer contributions.
- Salary sacrifices which the employer makes on your behalf.
- Other pre-tax income contributions which the employer pays into your superannuation on your behalf. Such as
- the administration fees and the insurance premiums.
- Any other contributions made by your employer.
The Concessional contributions which you make into your superannuation are taxed at the rate of 15% which is normally lower than the income tax rate that you pay in your taxable income.
However, there is a cap on the Concessional contributions which is $25,000 per annual irrespective of your age.
You will be able to rollover your unused concessional contribution cap from 1 July 2018, this is only available if your superannuation balance is less than $500,000 at the end of the previous financial year. The unused cap can only available for 5 years.
Non-concessional contribution is the contribution made into your superannuation account after tax. Therefore the Non-concessional contributions are not taxed within your superannuation account as you have already paid tax on them.
The cap of Non-concessional contribution is $100,000 per year from 1 July 2017. It is only available when you total superannuation balance is less than $1.6 million at the end of previous financial year. Tax which applies on the amounts over the cap is 47% for the financial year of 2017/2018 plus 2% of Medical levy.
If you are under 65 years of age, you can use the Non-concessional contributions cap for the next 3 years, which means that you can make $300,000 annual Non-concessional contribution in a single financial year. However the balance of your superannuation account has be less than $1.5 million at the end of the previous financial year.
If you are 65 years of age or older, you cannot use the bring-forward rule and your Non-concessional contribution cap will remain $100,000 since the financial year of 2017/2018.
If you are between 65-74 years of age, you have to pass the Work Test to do the voluntary super contributions into your superannuation account, such as the salary sacrifices, personal contributions or spouse contributions.
The Working Test requests that you have to work for 40 hours during a consecutive 30-days’ period each financial year.
If you are above 75 years of age, the only contribution that can be accepted by your superannuation fund is the employer contribution if you are still working.
Appendix information from ATO website
Table 1: Concessional contributions caps made from 2013–14 onwards
|Financial year||Your age||Your concessional
|2016–17||Less than 49 on 30 June 2016||$30,000|
|2016–17||49 or older on 30 June 2016||$35,000|
|2015–16||Less than 49 on 30 June 2015||$30,000|
|2015–16||49 or older on 30 June 2015||$35,000|
|2014–15||Less than 49 on 30 June 2014||$30,000|
|2014–15||49 or older on 30 June 2014||$35,000|
|2013–14||Less than 59 on 30 June 2013||$25,000|
|2013–14||59 or older on 30 June 2013||$35,000|
Table 2: Non-concessional contribution caps
|Financial year||Non-concessional cap||Tax on amounts over cap|
|2016–17||$180,000||47% (plus 2% budget repair levy)|
|2015–16||$180,000||47% (plus 2% budget repair levy)|
|2014–15||$180,000||47% (plus 2% budget repair levy)|