Super contribution caps | Wilson & Assoc Chartered Accountants

Frequently Asked Questions on Super Contribution Caps

Can I put more into my super?

You can make additional contribution to your super fund.

There are different limits for concessional contributions and non-concessional contributions. 

What is concessional  contribution?

Concessional contributions are contributions made into to your superannuation fund before-tax. 

Concessional contributions are taxed at 15% and include:

•    Employer Super Guarantee contribution amounts.
•    Salary sacrifice contributions that you’ve arranged with your employer.
•    After-tax contributions you’ve made that you elect to make tax-deductible by completing the ATO notice of intent to claim a tax deduction form.

What are non-concessional contributions?

Non-concessional contributions (NCCs) are super contributions made from after-tax pay or savings. They include:

•    personal contributions you make into your own super account that are not claimed as a tax deduction.
•    personal contributions made by your spouse into your super account (spouse contributions), and
certain other amounts.  Refer the Australian Taxation Office (ATO) for further details.

What are the super contributions caps?

The super contribution caps for the 2022/23 year are:

Before-tax or concessional contributions cap                  $27,500 per year
After-tax or non-concessional contributions cap $110,000 per year, or
$330,000 over three years.

If you contribute too much you may have to pay extra tax and a charge.

What is the concessional contributions cap?

For 2022/23, the concessional contribution cap is $27,500 per year. This covers all before-tax contributions – employer super payments, salary sacrifice and the personal contributions you claim as a tax deduction.

If you earn less than $250,000 p.a. these contributions are taxed at 15% (concessional rate). If you earn above that, contributions are taxed at 30%.

Can I carry forward unused concessional contributions?

If you don’t reach the before-tax contribution cap one year, you may be able to carry over the unused portion to future years. This is known as the carry forward rule (concessional contributions).

You can carry forward unused caps for up to five years, as long as your super balance is less than $500,000 at 30 June.

For example, if your total before-tax contributions last year were $20,000, you can carry over the remaining $7,500 contribution limit to this year, and therefore contribute up to $35,000 before tax, without being penalised.

Note, this is not the same as the bring forward rule which is only for non-concessional (after tax) contributions.

What is the non-concessional contributions cap?

The non-concessional (after tax) contributions cap for 2022/23 is $110,000 p.a. – or under certain criteria $330,000 over three years.

These contributions are voluntary payments to your super that aren’t claimed as a tax deduction and are not taxed when paid to your super. But your total super balance must be less than $1.7 million.

Non-concessional contributions can also include contributions your spouse makes into your super account and transfers from foreign super funds such as KiwiSaver.

Can I bring forward non-concessional contributions?

The bring-forward rule (non-concessional contributions) allows you to use the $110,000 after-tax contribution caps from future years, and apply them to a single year. As long as you are under 75 years of age in the first year, you can use the caps from the next two years, making it possible to contribute up to $330,000 in one year without penalty. Of course, it means you reduce your limit for the next year or two.

Simply put, as long as your average annual contributions over three consecutive years is $110,000 or less, then you won’t be penalised.

What happens if  I paid too much?

There might be an excess contribution charge if you pay into your super more than the contribution caps.

If your before-tax contributions are over the cap you can choose to withdraw up to 85% of the excess.

If your after-tax contributions are over the cap try the bring forward rule above.

If you are stuck, talk with your financial planner or fund manager.

Is there an age limit to the contribution caps ?

There is no upper age limit for the contribution caps.  They still apply if you are over 67.

Source: Industry Super

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Disclcaimer: The information provided within this article is general information only.  None of the comments in these notes are intended to be advice, whether legal, financial product or professional. You should obtain specific advice regarding your particular circumstances from a tax or legal professional.

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