Contribution caps

 

Super is tax smart

As an incentive to help Australians save for retirement, super receives tax concessions. But there are limits on the amount of contributions you can make to your super account each year that attract the concessional tax treatment of 15%. These limits are known as contribution caps.

Contribution caps

There are different contribution caps for before-tax contributions and after-tax contributions.

Before-tax contributions are capped at $25,000 a year

These include the compulsory contributions your employer makes (usually 9.5% of your wages) and any other before tax money you put in (usually through salary sacrifice).

After-tax contributions are capped at $100,000 a year OR $300,000 over a three year period (if you’re under 65)

This is money that you put into your super, which you have already paid tax on. This could be through a regular after-tax contribution you have arranged with your employer, or any one-off payments you’ve made to your super.

 

How much can you contribute?

Use our Contributions calculator to see exactly how much extra you can put into your super, without exceeding the cap.

 

What happens if you exceed your cap?

Don’t worry too much if you exceed your contributions cap. You’re still putting extra money into your super, and that will pay off in the long run.

If you exceed your:

  • before-tax contributions cap, the amount over the cap is simply taxed as income at your marginal income tax rate, plus a small charge; and
  • after-tax contributions cap, the amount over the cap can be withdrawn without penalty although earnings will be taxed at the top marginal rate plus the Medicare levy.
 

Need help with your contribution strategy?

Call us on 1800 757 607 to talk to a Financial Planner about your options.

 

Learn more