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  • Concessional contributions and contribution caps

    Concessional contributions are contributions that are made into your super fund before tax. They are taxed at a rate of 15% in your super fund.

    From 1 July 2021, the concessional contributions cap is $27,500. The increase is a result of indexation in line with average weekly ordinary time earnings (AWOTE).

    From 1 July 2017 to 30 June 2021, the concessional contribution cap for each year is $25,000.

    Your cap may be higher if you did not use the full amount of your cap in earlier years. This is called the carry-forward of unused concessional contributions.

    You can check your available concessional contributions cap on ATO online services (accessed via myGov).

    If you exceed your concessional contribution caps, the amount over the cap is your excess concessional contributions. We will send you a letter (determination) and a notice of assessment. You may receive these in your myGov Inbox.

    The correspondence will tell you:

    • your excess concessional contributions
    • your excess concessional contributions charge (for the period 2013–14 to 2020–21 income years only)
    • what options are available.

    If you receive a letter you must lodge a tax return for that year.

    For more information, see Types of concessional contributions.

    Division 293

    If your combined income and concessional contributions are more than $250,000 you may have to pay extra tax, see Additional tax on concessional contributions (Division 293).

    Find out about

    Types of concessional contributions

    Concessional contributions include:

    However, depending on your age and work status some types of contributions may not be able to be accepted by your super fund (see Acceptance of member contributions and work test).

    If you split some of your concessional contributions and give some to your spouse, they still count as your contributions, and go towards your concessional contributions cap. Read more on splitting your concessional contributions.

    If you have more than one fund, concessional contributions made to all your funds during a financial year are added together and counted towards your concessional contributions cap.

    For more information, see:

    Constitutionally protected funds and unfunded defined benefit funds

    Before 1 July 2017, the following did not count towards your concessional contributions cap:

    However, from 1 July 2017 contributions made to, and certain other amounts allocated to interests in, CPFs and unfunded defined benefit funds do count towards your concessional contributions cap.

    Defined benefit contributions represent the annual increase in your interest in a defined benefit fund, based on the benefit you are expected to receive when you leave the fund. This amount is calculated following rules set out in the Income Tax Assessment Regulations 1997.

    Unfunded defined benefit contributions are the amounts by which your defined benefit contributions exceed your notional taxed contributions if you are a member of an unfunded or partially unfunded defined benefit fund.

    These contributions, as well as amounts made to certain funded defined benefit interests that are subject to the grandfathering transitional rules, cannot on their own result in you exceeding your concessional contributions cap for a financial year. However, they will be used to assess your liability for Division 293 tax.

    By counting these contributions towards your concessional contributions cap you may not be able to make additional concessional contributions to other funds without exceeding your cap and having to pay extra tax.

    LCR 2016/11 explains how concessional contributions are calculated for CPFs and defined benefit interests from 1 July 2017.

    We recommend you check with:

    • your fund to review your arrangements with CPFs, unfunded defined benefit funds and other super funds
    • your employer about your      
      • salary sacrifice agreements
      • amounts being paid to CPFs or other funds
      • other contributions to CPFs and defined benefit funds. 

    Example: Member of CPF

    Meenu's employer made concessional contributions of $30,000 to an accumulation interest in a CPF in 2020–21.

    Her general concessional contributions cap for 2020–21 was $25,000. She can check her personal concessional contributions cap on ATO online services.

    Even though the concessional contributions made to the CPF were more than her general cap of $25,000, they will be treated as being equal to her general concessional contributions cap. She is not considered to have exceeded her concessional contributions cap for the year.

    However, if Meenu also made concessional contributions to a non-CPF accumulation fund during 2020–21, those amounts would be treated as excess concessional contributions.

    End of example

    See also

    Compensation and your concessional contribution cap

    The Super contribution caps fact sheet explains the impact on your contribution caps if amounts of compensation are received from financial service providers by your super fund.

    It explains the impact on your concessional or non-concessional super contribution caps or both where an amount of compensation is received by your super fund and allocated to your account.

    It also explains how you may apply to the ATO to request the Commissioner's discretion to disregard or reallocate your contributions if you have or will exceed your concessional or non-concessional contribution caps.

    Your super fund may receive compensation from a financial services provider if you received inappropriate financial advice, or where fees were paid but no advice was given. The compensation may include an amount reflecting a refund or reimbursement of adviser fees, and/or an amount to compensate for lost earnings. It may also include an interest component.

    Whether the compensation is a contribution, and therefore counted towards your contribution caps will depend on the circumstances in which the compensation is received, including:

    • where your super fund engaged the financial service provider and has a right to compensation
    • where you personally engaged the financial services provider, and you have a right to compensation
    • where there is no right to compensation.

    If the compensation was paid directly by the financial service provider to your super fund other than at your direction, the compensation will be a concessional contribution in the financial year it is received by the fund.

    See also

      Last modified: 12 May 2022QC 19749