About the concessional contributions cap
The concessional contributions cap is the maximum amount of before-tax contributions you can contribute to your super each year without contributions being subject to extra tax.
From 1 July 2021, the concessional contributions cap is $27,500.
From 1 July 2017 to 30 June 2021, the concessional contribution cap for each year was $25,000.
The cap increases in increments of $2,500 in line with the statistical measure of average weekly ordinary time earnings (AWOTE).
If you have unused cap amounts from previous years, you may be able to carry them forward to increase your contribution caps in later years.
Keeping track of your concessional contributions
You can keep track of your concessional contributions by using ATO online services. Select Super, then Information, then Concessional contributions.
To ensure you stay under the concessional contribution cap:
- Be aware of your concessional contributions cap, including any unused contribution cap amounts from previous years.
- Be aware of your total super balance.
- Keep track of the contributions you, your employer(s) or others make on your behalf, particularly if you have more than one job or pay money into more than one super fund. Concessional contributions made to all your funds during a financial year are added together and counted towards your concessional contributions cap. You can track contributions that funds have reported to us on ATO online services.
- Check when your employer pays super guarantee and other contributions (including any provisions on timing if you have a salary sacrifice agreement), and when they were received by your super fund. Contributions count towards a cap in the year your super fund receives them.
- If you are a member of an unfunded defined benefit or constitutionally protected fund, be aware of how concessional contributions to these funds are treated.
- Check if your employer pays costs on your behalf to your fund, such as administration fees and insurance premiums. These amounts are included in your concessional contributions cap.
- If you are eligible to claim a tax deduction for your personal super contributions, the amount allowed as a deduction is included in your concessional contributions cap.
Be aware of payment and reporting timelines
- Your employer can make super guarantee contributions for the quarter ending on 30 June by 28 July in the next financial year. If you have a salary sacrifice contributions agreement with your employer, and you want your fund to receive them by 30 June, ensure your employer includes this in the agreement.
Your contributions information displayed in ATO online services is based on when your fund(s) report to us, and may not be up to date.
Self-managed super fund members
If you're a member of a self-managed superannuation fund (SMSF), you may be able to make a concessional contribution in one financial year and have it count towards your concessional contributions cap in the following financial year (see Request to adjust concessional contributions).
If you're at risk of exceeding the cap
If you think you may go over your concessional contributions cap in the current financial year:
- stop or reduce any before-tax voluntary contributions to your super
- delay making any personal super contributions you intend to claim as a deduction in your tax return.
If you have 2 or more employers and you think your employers' compulsory super guarantee contributions will exceed your concessional contributions cap, you can apply to opt out of receiving super guarantee from one or more of your employers.
If your contributions for a financial year exceed or will exceed your contributions cap due to special circumstances, you can apply for some or all of your contributions to be disregarded or reallocated to another year.
Carry forward unused contribution cap amounts
If you have unused concessional cap amounts from previous years, you may be able to carry them forward to increase your contribution caps in later years. You're eligible to do this if you:
- have a total super balance of less than $500,000 at 30 June of the previous financial year
- have unused concessional contributions cap amounts from up to 5 previous years (but not before 2018–19).
The unused cap amounts you can carry forward depends on the amount you have contributed in previous years, starting from 2018–19. You can carry forward unused cap amounts from up to 5 previous financial years, including when you were not a member of a super fund.
The oldest available unused cap amounts are carried forward first. For example, unused cap amounts from 2018–19 would be used to increase your cap first before unused cap amounts from 2019–20.
Unused cap amounts are available for 5 years and expire after this. For example, a 2018–19 unused cap amount that is not used by the end of 2023–24 will expire.
Unused concessional cap amounts are applied automatically once you exceed the cap in any year.
If you still have made excess concessional contributions (ECC) after applying unused cap amounts, you may need to pay extra tax.
Your available carry-forward contribution amounts are shown on ATO online services (select Super, then Information, then Carry forward concessional contributions).
Example: using carry forward concessional contributions
As Sam and his employer have been contributing less than his concessional contributions cap over several years, he has accumulated unused caps he can access for up to 5 years.
In 2021-22, he was both in a financial position and eligible to make additional contributions.
Working out Sam's super contributions cap amountsContributions from Sam and his employer 2018–19 |
TSB at end of previous financial year |
Unused concessional cap accumulation |
|---|---|---|
$5,000 super guarantee (SG) |
$480,000 and growing |
$25,000 |
Sam's options:
- Sam has no extra money to contribute.
Contributions from Sam and his employer 2019–20 |
TSB at end of previous financial year |
Unused concessional cap accumulation |
|---|---|---|
$3,000 SG |
$490,000 and growing |
$20,000 |
Sam's options:
- Sam has no money to contribute.
Contributions from Sam and his employer 2020–21 |
TSB at end of previous financial year |
Unused concessional cap accumulation |
|---|---|---|
$0 |
$505,000 |
$42,000 |
Sam's options:
- Sam has money to contribute but can’t carry forward the unused cap amounts because his TSB is over $500,000.
Contributions from Sam and his employer 2021–22 |
TSB at end of previous financial year |
Unused concessional cap accumulation |
|---|---|---|
$10,000 SG |
$490,000 |
$67,000 |
Sam's options:
- Sam has money to contribute because his TSB at 30 June 2021 is now less than $500,000. He can use the unused cap amounts and contribute up to $94,500.
If you exceed your concessional contributions cap
If you exceed your concessional contributions cap, the excess concessional contributions (ECC) are included in your assessable income.
ECC are taxed at your marginal tax rate less a 15% tax offset to account for the contributions tax already paid by your super fund. That is, the amount of tax on the excess amount is reduced by 15%.
When your assessable income includes ECC:
- you may enter the pay as you go (PAYG) instalment system
- your existing PAYG instalments may be affected
- the increase in your assessable income may affect your obligations and entitlements in relation to the Medicare levy, Centrelink benefits and child support.
Any ECC not released from your super fund counts towards your non-concessional contributions cap. If you do not or cannot elect to release your ECC, you could pay up to 94% in tax.
For Division 293 tax purposes, we count your concessional contributions but not your ECC.
Excess concessional contributions charge
For 2013–14 to 2020–21, if you exceeded your concessional contributions cap, you may have needed to pay the ECC charge.
From 1 July 2021, the ECC charge no longer applies.
We will let you know you have exceeded your cap
If you have ECC, we will send you an ECC determination letter with details of what you need to do.
You'll also receive an income tax notice of assessment (NOA) with details of the:
- ECC in your assessable income
- non-refundable tax offset amount (15% of the ECC).
We determine if you exceeded your concessional contributions cap from information reported by your super fund and in your tax return. In the case of SMSFs, we also take into consideration any contribution adjustment forms that have been lodged by SMSF members.
If after you lodge your tax return, your fund reports contributions that result in you having ECC, we will amend your tax return and send you an amended NOA and an ECC determination.
Releasing excess concessional contributions from your fund
You can withdraw up to 85% of your ECC from your super fund to pay your income tax liability.
You can choose to withdraw the amounts from one or more funds. The total amount withdrawn cannot be more than 85% of the excess concessional contribution amount stated in your determination.
You can release your ECC either:
- by using ATO online services (select Super, then Manage, then Concessional election)
- by downloading (or ordering a paper copy) and completing an Excess concessional contributions election form
- through your tax agent.
Before making an election, you should check that you have enough money in your fund(s).
Members of defined benefit funds should check with the fund as they may not be able to release an amount.
Once you make an election, you cannot withdraw or revoke it.
If you release 85% of your ECC, none of it will:
- be treated as non-concessional contributions
- count towards your non-concessional contributions cap.
If you release less than 85% of your ECC, some or all your ECC will:
- still be treated as non-concessional contributions, and
- count towards your non-concessional contributions cap.
When your election has been successfully lodged and processed, we issue a release authority to the relevant super funds, which have 10 business days to send the requested amount to us.
The amount sent to us is used to pay any of your tax or other Australian Government debts. We will refund any remaining balance to you.
The super fund must release the full amount you elected to us unless you:
- don't have enough funds available
- no longer have any super interests with the fund
- have funds that cannot be released because they are in a defined benefit interest.
You have 60 days to make an election. However, the option to make an election will still be available in our online services for up to 120 days after the date of issue of the determination. You cannot lodge an election form via ATO online services after 120 days, but your tax agent can do this on your behalf. On receipt, we will decide if we accept the election based on the circumstances.
If a fund is not able to release all or part of the elected amount, we will let you know. You will have another 60 days to make a new election to another fund.
If you don't have another fund, you will need to pay your income tax liability out of your own money.
If you don't release your ECC
Any ECC you don't elect to have released will count towards your non-concessional contributions cap. This can mean that:
- where your total super balance is above the general transfer balance cap, you will also exceed your non-concessional contributions cap and may pay up to 94% in tax
- if you have triggered the bring-forward arrangement for non-concessional contributions and have made non-concessional contributions up to the bring-forward cap, you will also exceed your non-concessional contributions cap
- if you're not entitled to the bring-forward arrangement for non-concessional contributions and you have made non-concessional contributions equal to your non-concessional contributions cap, you will also exceed your non-concessional contributions cap
- you can unintentionally trigger the bring-forward arrangement for non-concessional contributions where your unreleased ECC is included as non-concessional contributions.
If you are a member of a defined benefit fund, you may not be able to release ECC from that fund.
You should consider the tax consequences of releasing or not releasing ECC from a super fund. You may want to seek financial advice.
Keep track of your concessional (before-tax) contributions so you don't exceed the contributions cap.