Note: This article is current for the 2018/2019 financial year. SuperGuide regularly publishes an updated super checklist for beginner readers. More advanced checklists can be found elsewhere on the site. Use this list as a prompt for your 2018/2019 super resolutions. You may not keep all of your resolutions, but ... Read more
Excess contributions
The amount of money you can deposit in superannuation fund each year, is subject to superannuation contributions caps.
Concessional (before-tax) contributions are subject to an annual concessional contributions cap, which is increased periodically.
Non-concessional (after-tax) contributions are also subject to an annual non-concessional contributions cap (indexed in line with the concessional contributions cap), and Australians under the age of 65 can bring forward up to 2 years of the non-concessional cap in a single year (bring-forward rule).
If your super contributions (concessional or non-concessional) exceed the relevant cap, the amount of super contributions above the cap are known as excess contributions – excess concessional contributions if above the concessional cap, and excess non-concessional contributions if above the non-concessional cap.
For a summary of the excess contributions rules, see SuperGuide article Excess contributions rules: A quick summary. For a quick explanation of the rules, continuing reading the next few paragraphs.
Excess concessional contributions
Excess concessional (before-tax) contributions and associated earnings are counted towards the person’s assessable income for the financial year in which the excess contributions were made, less a 15% tax offset for contributions and earnings tax already paid. Excess concessional contributions can be withdrawn from the super fund to pay the additional income tax.
Excess non-concessional contributions
Excess non-concessional (after-tax) contributions can be withdrawn, and the associated earnings on those excess contributions count towards the person’s assessable income, less a 15% tax offset for contributions and earnings tax already paid. If a person chooses not to withdraw the excess non-concessional contributions, then those excess contributions are subject to the top marginal rate of tax.
Below are key articles on excess contributions:
Set out below are all SuperGuide articles referring to Excess contributions.
Excess contributions rules: A quick summary
If you plan to make superannuation contributions to a super fund, you need to be mindful of the contributions caps for both concessional (before tax) contributions and for non-concessional (after-tax) contributions. You also need to understand the financial (or other) consequences of exceeding those contributions ... Read more
Turning 65: Maxing out the after-tax contributions cap
Note: For the 2018/2019 year (1 July 2018 through to 30 June 2019), the annual non-concessional contributions cap is $100,000, and the 3-year bring-forward cap is $300,000. The $100,000 annual cap and the $300,000 bring-forward cap also applied for the 2017/2018 year. (For the 2016/2017 year, the annual after-tax ... Read more
Does the government’s co-contribution count towards my contributions cap?
Q: Does a co-contribution received after using up the total bring forward cap of $300,000 mean that an excess contribution has been made, or is the Government co-contribution excluded from the after-tax contribution cap? A: A superannuation co-contribution is a super contribution paid by the federal government into ... Read more
Super contributions: Can I make a retrospective payment to my fund to reduce tax?
Q: After completing my personal tax return my accountant advised I was up for $45,000 in income tax – (I had ceased work and sold an investment property, then unexpectedly recommenced work). My question to you is: Can I now make a contribution to my SMSF to reduce the income tax payable personally, that is, making the ... Read more
Super for beginners, part 15: Super tax – as easy as 1-2-3
Superannuation only exists because of how super savings are taxed. Superannuation savings receive tax incentives to encourage Australians to choose super as a retirement savings option. Even so, superannuation is still taxed (for most Australians), but at a lower rate of tax than non-superannuation income and ... Read more
Boost your super: 10 planning tips for 2018/2019 year
Although many people are still grappling with the superannuation changes that took effect from July 2017, and several more that took effect from July 2018, it’s important to note that many of the underlying super rules remain unchanged. For example, the Superannuation Guarantee (SG) rates remain the same, contributions ... Read more
Double contributions tax for more high-income earners
Note: Since 1 July 2017, anyone earning an ‘income for surcharge purposes’ of more than $250,000 pays an extra 15% tax (total of 30%) on concessional (before-tax) super contributions. Before July 2017 (and since July 2012), the ‘threshold income for surcharge purposes’ was $300,000, and anyone earning an ‘income for ... Read more
Non-concessional contributions: 10 facts about the $100,000 cap
The annual $100,000 non-concessional (after-tax) contributions cap became law on 29 November 2016, and took effect from 1 July 2017 (from the start of the 2017/2018 year), and continues to apply for the 2018/2019 financial year. We receive a lot of questions from readers seeking information about how the ... Read more
The short story on super contributions limits (2018/2019 year)
You can make two types of superannuation contributions – concessional (before-tax) contributions and non-concessional (after-tax) contributions – and each type of contribution has a separate limit known as a contributions cap (see text and tables below). Short story on concessional contributions Short story on ... Read more
Super concessional (before-tax) contributions: 2018/2019 survival guide
Note: This article explains the rules applicable to concessional contributions for the 2018/2019 year (and for the 2017/2018 year, and later in the article, also explains the rules applicable for the 2016/2017 year, and earlier financial years). Superannuation contributions can be divided into two types — ... Read more
Bring-forward rule: A definitive super guide
Note: The information in this article relates to the 2018/2019 financial year and the 2017/2018 financial year (and also refers to the rules applicable for the 2016/2017 financial year). For the 2018/2019 year, the annual non-concessional contributions cap remains at $100,000, and in turn, the bring-forward cap ... Read more
