Welcome to a new tax year, and with all new years it is an opportune time to think about the future. And the future is Super. Superannuation are those savings designed to support us in our retirement, and we can make contributions to help our super balance grow. The main types of contributions to super are concessional and non-concessional.

Concessional Contributions

Concessional contributions are contributions into super for which a tax deduction has been claimed. This includes contributions by your employer as well as personal contributions.

  • Employer contributions consist of the super guarantee (SG) your employer is required to pay on your wage, as well as amounts they pay under a salary sacrifice arrangement you may have. From 1 July 2022 the SG payable by your employer is 10.5% of your wage (or ordinary time earnings).
  • Personal contributions are amounts you have paid into your super fund with the intention to claim a tax deduction in your personal tax return at the end of the financial year.

For 2022/2023 the annual cap on all concessional contributions made for you is $27,500. If you have more than one super fund all the concessional contributions made to all your funds are added together and counted towards your concessional contributions cap.

From 2019/2020 carried forward rules were introduced allowing you to make extra concessional contributions, above the annual cap, without paying additional tax. To be eligible your total super balance at 30 June of the previous financial year must be less than $500,000, and you must have unused concessional contributions from prior years.

Non-Concessional Contributions

Non-concessional contributions are contributions into super that are from your after-tax income, and are not taxed in your super fund. Non-concessional contributions can also include contributions made by your spouse into your super fund, transfers from foreign super funds and after-tax contributions from your employer.

For 2022/2023 the annual cap on all your non-concessional contributions is $110,000. As with concessional contributions if you have more than one super fund all the non-concessional contributions from all your super funds are added together and counted towards your cap.

If you exceed the annual non-concessional contributions cap you may be eligible to access future year caps. This is known as the bring-forward arrangement, and allows you to make extra non-concessional contributions without having to pay extra tax. Eligibility for accessing the bring-forward arrangement is dependent upon your age and your total super balance at 30 June of the previous financial year.

If your concessional and / or non-concessional contributions exceed the annual caps, and you are not eligible to access either the carried forward unused concessional contributions or the non-concessional contribution bring-forward arrangement you are liable for excess contributions charges and tax applied by the ATO.

If you have any questions about super contribution limits, including your eligibility for unused carried forward concessions and the non-concessional bring forward arrangement, then please do not hesitate to contact our us for assistance.

Other related blogs:

What is a withdrawal and re-contribution strategy?
Carry forward concessional contributions – what are the rules?

Author: Brigette Liddelow

Email: brigette@faj.com.au