ECT - applying to have your contributions disregarded or reallocated

What is excess contributions tax?

Excess contributions tax (ECT) is a tax you are liable to pay on contributions made to your super that exceed your concessional or non-concessional contributions cap. The cap amount, and the amount of extra tax you are liable for once a cap amount is exceeded, depends on whether the contributions are concessional or non-concessional contributions.

ECT is not a penalty; it is just the amount of tax that parliament has decided should be imposed when your contributions exceed a relevant cap.

We usually work out if you have to pay ECT from information your super fund provides us and your income tax return.

If we work out you have excess contributions, we will write to you so you can check that the information used in our calculation is correct.

If the information is correct, you do not need to do anything else and we will send you either:

• an ECT assessment, or
• if you are eligible, a once-only offer to have the excess concessional contributions refunded to you, so you can pay tax on them at your marginal tax rate.

Special circumstances

If you believe that you exceeded a cap due to special circumstances, you can apply to the Commissioner for a determination that some or all of a contribution be either disregarded or reallocated to another year. This document will help you understand how to apply for a determination and what the Commissioner will consider when making a decision.

You should not apply for a determination if you believe we have: relied on incorrect information - you should attempt to get the information corrected applied the law wrongly - you should object to the assessment, explaining where you think we applied the law wrongly. If you exceeded your non-concessional contributions cap because of a single contribution, your super fund may have been required to return the excess amount to you. This means you may not have to pay ECT. If this is relevant to you, discuss it with your super fund.

For more information about ECT, refer to Super contributions - too much super can mean extra tax. For more information about how we work out your contributions, refer to Excess contributions tax and how funds report your contributions.