Contribution caps

There are limits on how much money you can put into super each year without penalty. These are called ‘contribution caps’.


There are two types of super contributions:

  • before-tax (concessional)
  • after-tax (non-concessional)

Before-tax (concessional) contributions

Before-tax contributions include:

  • employer contributions including super guarantee (SG) and other compulsory contributions
  • salary sacrifice contributions
  • personal contributions you've successfully claimed a tax deduction for.

After-tax (non-concessional) contributions

After-tax contributions include:

  • personal contributions you haven't claimed a tax deduction for
  • spouse contributions
  • any excess concessional contributions. 

For more detailed information read our Super contributions fact sheet, email us at info@tasplan.com.au or call us on 1800 005 166.

Two types of caps

Before-tax (concessional) contribution cap

The before-tax contribution cap is the limit that applies to before-tax contributions made to your super in a financial year before extra tax kicks in. For the 2019-20 year, it's $25,000 each year, regardless of your age. 

If you haven’t used all of your cap in any financial year from 1 July 2018, you may be able to carry forward the unused cap amounts to use in future financial years. You can carry forward the unused before-tax contributions for up to five years if the sum of all you super accounts was less than $500,000 at the end of the previous year. Amounts carried forward that haven’t been used after five years will expire.

After-tax (non-concessional) contribution cap

The after-tax contribution cap is $100,000 for 2019-20.

A helpful tip for after-tax contributions

If you’re under 65 at any time during the financial year and your total super balance is less than $1.6 million, you may be able to bring forward two year’s worth of after-tax contributions. This means that you could contribute up to three times the annual cap in one year (but less in future years) if you’re eligible. The ‘bring-forward rule’ is automatically triggered when your after-tax contributions exceed the relevant cap in a financial year.

What if you exceed the caps?

The government taxes contributions above the cap at your marginal rate. But you’re allowed to withdraw any excess contributions from your super account.

If you go over a contribution cap, you’ll receive an excess contributions tax assessment from the ATO. You’ll have to pay the excess tax yourself and/or by drawing on your super.

It’s important to realise that any concessional contributions over the cap will also count towards your non-concessional contributions cap.

 

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