You can make contributions into your super account from your take home pay or money outside the super system. Since these contributions have already been taxed before you contribute them to your super account, they are not treated concessionally and are called non-concessional contributions.
Excess contributions
Excess super contributions are any payments you make to your super fund that cause you to exceed your contribution caps.
Contribution caps are limits on the super contributions you can make to your super fund each year. There are two types of contributions: concessional (before-tax) and non-concessional (after-tax), and each has a contributions cap.
If you exceed your concessional contributions cap, the excess amount is included as assessable income in your tax return. You will pay tax on it at your marginal tax rate, less the 15% tax you will already have paid in your super fund.
If you exceed your non-concessional contributions cap, the Australian Taxation Office (ATO) will give you the following two options.
- Withdraw the excess non-concessional contributions and 85% of the associated investment earnings within 60 days. If you don’t, the ATO will request that your super fund does this on your behalf.
- Leave the excess non-concessional contributions and associated earnings in your super account. If you choose this option, these amounts are taxed at the top marginal tax rate (currently 47%).
Set out below are all SuperGuide articles that relate to Excess contributions.
2019/2020 guide to concessional contributions (before-tax super contributions)
Although it can be difficult getting your head around all the different types of super contributions that go into your super account, concessional contributions are the ones you are mostly likely to have and are pretty straightforward to understand.
A super guide to understanding the bring-forward rule
Although it sounds complicated, bring-forward contributions are just what they sound like – you bring forward your non-concessional contributions caps from future years and use them in a shorter time period.
How the Division 293 tax works: Super surcharge for high earners
For most high income earners, saving for your retirement through super is a sensible strategy, but you need to watch you don’t fall foul of the dreaded Division 293 tax.
What to do if you exceed your super contributions caps
Read this article to learn more about how much you can contribute and what happens if you exceed your super contribution caps.
Richest Australians to take super hit
Next month’s federal budget will hit the generous superannuation tax breaks received by the very richest Australians. The target will be the highest one to two per cent of earners, with the government arguing that the cutback is necessary to keep superannuation concessions sustainable over the longer term.