Concessional (before-tax) contributions
Generally, a concessional contribution is a contribution that is made by or for you to a complying super fund and is assessable income of the fund (which means that the fund will pay tax on the contribution). If the contributor is able to claim an income tax deduction for the contribution, the contribution effectively comes from their 'before-tax' income.
Concessional contributions include:
- employer contributions such as
- compulsory super guarantee contributions
- any additional voluntary super contributions your employer may make
- any fund costs paid by your employer on behalf of your super fund, such as administration fees and insurance premiums
- the equivalent of your employer contributions under a defined benefit scheme as determined by the trustee
- salary sacrifice amounts
- personal contributions by an eligible person (such as a self-employed person) that are allowed as an income tax deduction
- transfers from reserves (as defined by the regulations to the legislation)
- the taxable component of a directed termination payment (or the total of directed termination payments plus any transitional eligible termination payments) in excess of $1 million.
Concessional contributions cap
The concessional contributions cap is the limit on the amount of concessional contributions you can make each year before you pay extra tax. For the 2012-13 year the concessional cap is $25,000 for everyone, regardless of age or super balance.
If you split your taxed super contributions with your spouse, the full amount of the original contribution counts towards your concessional contributions cap.
Any amount over the concessional contributions cap will be taxed at an additional 31.5%. You're personally liable for this tax, but you can use the release authority we give you to ask your super fund to release money up to the amount of this tax. The excess amount will also count towards your non-concessional contributions cap.
It's important to regularly monitor the contributions made to your super fund if you don't want to inadvertently exceed a cap.
Timing of your contributions can also be important. Contributions are counted towards the caps in the year in which they are received and credited by your super fund. For example, your employer may send contributions to the fund in the month after each quarter, which means that contributions for April-June will be received by the super fund in July and will therefore count towards the next financial year caps.
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For more information about concessional contributions:
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Sections within Other contributions
Last Modified: Tuesday, 29 January 2013