If you exceed your non-concessional contributions cap

For most people the non-concessional contribution cap (limit) is $110,000 per financial year (from 1 July 2021).

On this page

About exceeding your cap
Your options if you exceed the cap
Special circumstances
How to make an election
Tips to help avoid exceeding the non-concessional cap

About exceeding your cap

To work out if you have exceeded the non-concessional contributions cap, we assess the information reported to us by your super fund and in your return (if you lodged it) and consider your age (date of birth).

You must not apply to your super fund to release an amount relating to exceeding your cap. You must wait until we have sent you your determination letter and you have selected your option for paying the tax. We will then send your fund a release authority.

If you exceed your non-concessional contributions cap:

we will send you a determination which explains your options
you must lodge a tax return for that year. If you can't lodge your tax return by the due date, and you don't want us to issue a determination before you lodge, you will need to request a lodgment deferral
we will manage the release of money from your super
you may need to pay extra tax.

Your options if you exceed the cap

You have 60 days to elect one of the 2 options for paying your tax when you receive our determination letter.

You cannot change your election decision once you make it.

If you believe the excess non-concessional contributions (ENCC) determination is wrong, see If the information used for excess contributions is wrong.

You have 2 election options when you receive your determination letter
Option	Tax	Taxable income
Option 1 With Option 1 you release both: the entire excess contributions amount from your super 85% of the associated earnings (this is an amount calculated by us to approximate the amount earned from the excess contributions while in the fund. We will add the full amount of associated earnings to your assessable income and give you a 15% tax offset. We will issue you with an amended notice of assessment. A change in your assessable income may impact government benefits or payments you receive or make (e.g. childcare subsidy). You need to make an election choosing Option 1 to release.	May pay tax on your associated earning at your marginal tax rate, including Medicare levy.	Increases
Option 2 With Option 2, you: do not release an amount in relation to the excess are assessed for excess non-concessional contributions tax. You choose to leave the excess contributions and associated earnings in your super. We will send you a notice of assessment taxing you on your entire excess non-concessional contributions at the 47% tax rate. This tax will need to be paid from your super. We will send a release authority to your fund to release your tax amount and pay it to us. You need to make an election choosing Option 2 if you want the tax to be paid from your super. If you are with a defined benefit fund, making an election and choosing Option 2 is the only option available to you. Your tax will need to be paid from your own pocket. If you are required to pay an excess non-concessional contributions tax liability on this assessment notice from your own funds – rather than from your super fund under a release authority – you will not be required to release this amount from your super fund in the future.	Pay 47% tax on the entire excess non concessional contributions.	No change

Other scenarios
Scenario	Tax	Taxable income
If you don't make your election, we will act on your behalf. If we don't hear from you within 60 days of sending you a Determination letter, we will default you to Option 1 as this attracts the least amount of tax. If your super fund does not allow this, we will proceed with Option 2. You must make an election if you want: to choose which super fund to release the money from this process to commence earlier.	Option 1: May pay tax on your associated earning at your marginal tax rate, including Medicare levy. Option 2: Pay 47% tax on the entire excess non concessional contributions.	Option 1: Taxable income increases Option 2: No change to taxable income
If we assess you have no money left in super, including pensions or interests in defined benefit funds, we will send you a Direction letter confirming this. You don't have to release money from your super. We will add the full amount of associated earnings to your assessable income and give you a 15% tax offset. We will issue you with an amended notice of assessment. A change in your assessable income may impact government benefits or payments you receive or make (e.g. childcare subsidy).	You may pay tax on your associated earnings at your marginal rate, including Medicare levy.	Taxable income increases

Example: ENCC determination letter received

For 2018–19, Reginald's total superannuation balance was $1,704,861.82. This means his non-concessional cap was $0.

Reginald makes a personal contribution of $100,000. This means he exceeded his non-concessional contribution cap by $100,000.

Reginald must not apply to his super fund to release any amount relating to exceeding his cap from his fund. He must wait until we have sent him his determination and he has selected his option to pay tax. We will then manage the required release by sending his fund a release authority.

We send him a Determination letter on 15 November 2019 outlining the following information:

Total superannuation balance as at 30/6/2018	$1,704,861.82
Non-concessional contribution cap	$0.00
Non-concessional contributions	$100,000.00
Excess non-concessional contributions (ENCC) for this determination	$100,000.00
Excess non-concessional contributions tax (Option 2)	$47,000.00
Associated earnings amount	$13,140.00
Associated earnings period	1 July 2018 to15 November 2019
Associated earnings rate	8.96%
85% of associated earnings amount	$11,169.00
Amount to be released from your super fund(s) under Option 1 ($100,000 + (85% × $13,140))	$111,169.00

The amounts Reginald would pay under the options are as follows.

Option 1: Reginald chooses to release excess from his super fund

Reginald received an ENCC determination for the 2018–19 income year with the following information:

ENCC of $100,000
Associated earnings of $13,140
Amount to be released from his fund under Option 1 is $111,169.

Reginald goes to ATO Online via myGov and makes a valid election choosing Option 1 to:

release the amount of $111,169 from his fund
be taxed on his associated earnings in his income tax return at his marginal tax rate.

The associated earnings of $13,140 are included in his assessable income for the 2018–19 income year. He also receives a tax offset of $1,971 ($13,140 × 15%). Reginald is sent an amended notice of assessment.

The ATO sends Reginald's fund a release authority to release $111,169 from his fund and pay it to the ATO. When we receive this amount, we offset any applicable ATO or Commonwealth debts from this amount then refund the balance to Reginald.

Option 2: Reginald chooses to not release an amount in relation to the excess and chooses to be assessed for excess non-concessional contributions tax.

Reginald goes to ATO Online via myGov and elects Option 2

Note: Reginald must select this option if his only superannuation interest is held in a defined benefit fund, and the fund cannot or will not voluntarily release from it.

We will send Reginald an ENCC tax assessment for $47,000.

We will also issue his super fund with a release authority to pay the ENCC tax liability amount to us.

If Reginald's only fund is a defined benefit fund which will not accept release authorities, then he will need to pay us the $47,000 from his own pocket.

If Reginald is required to pay an excess non-concessional contributions tax liability on his assessment notice from his own funds – rather than from his super fund under a release authority – he will not be required to release this amount from his super fund in the future.

Other option: Reginald does not make his election within 60 days of receiving his determination:

We default Reginald to option 1, unless his super fund does not allow the excess non-concessional contributions to be released. In that situation, we will proceed with option 2. We will send Reginald an ENCC tax assessment for $47,000.

End of example

Option 1 – release the excess from your super funds

You can elect to release all your excess non-concessional contributions plus 85% of your associated earnings from your super funds.

If you do, we will amend your income tax assessment to include:

your associated earnings in your taxable income
a non-refundable tax offset of 15% of the associated earnings.

You pay tax on associated earnings at your marginal tax rate.

Your taxable income may increase. This could affect any income support payments, child support or Centrelink benefits.

How this option works

Go to ATO Online via myGov or use the Excess non-concessional contributions election form to tell us you choose Option 1 and which super funds you wish to release the money from
We will
- ask your super fund to release excess amounts and associated earnings to us within 10 business days
- amend your income tax assessment and issue with an amended notice of assessment
- pay your tax and / or other Australian Government debts owing
- refund the balance to you.

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 for another fund.

What happens if full amount cannot be released

If your only remaining super interest is in a defined benefit fund and that fund cannot or will not release the amount, you can lodge an election for Option 2 to initiate the issuing of the ENCC tax assessment.

We will then:

send you an ENCC tax assessment. The excess non-concessional contributions will be taxed at the highest marginal tax rate plus Medicare Levy
issue your super fund with a release authority to pay the ENCC tax liability amount to us within 10 business days. If your fund is unable to release some or all of the amount you will need to pay the liability from your own sources
amend your income tax assessment to remove or reduce the associated earnings.

If you have no money left in super (including income streams or defined benefit interests) we will:

send you a letter telling you that you don't need to release any amount
still include the associated earnings in your income tax assessment.

Associated earnings

Associated earnings are an amount calculated to approximate the amount earned from the excess contributions while they were in your super fund.

How associated earnings are calculated

The associated earnings amount is calculated using 3 key elements:

your excess non-concessional contributions (ENCC)
the associated earnings rate – this is the average of the general interest charge rates for the 4 quarters of the financial year in which the ENCCs were made. This proxy rate may be more or less than the earnings rate applied by your super fund.
the associated earnings period – This is from 1 July of the financial year in which the ENCCs were made through to the date of the original ENCC determination letter.

The associated earnings rate is applied to the ENCC amount on a daily compounding basis for the length of the associated earnings period.

We do not have discretion to change the associated earnings rate or period.

Effect on your assessable income

When the associated earnings amount is included in your assessable income, the increase may have flow-on effects for a range of government income tests used for calculating offsets, surcharges, benefits and payments, such as:

child support
Centrelink benefits
super co-contributions
Medicare levy surcharge
Division 293 tax
eligibility for pay as you go instalments.

Option 2 – release no amount in relation to the excess and be assessed for excess non-concessional contributions tax

If you elect to leave the ENCC in your super funds you will receive an ENCC tax assessment. The excess amount is taxed at the highest marginal tax rate plus Medicare levy.

Table 7: ENCC tax rate
Financial year	ENCC tax rate
2021–22	47.0%
2020–21	47.0%
2019–20	47.0%
2018–19	47.0%

We will:

send you an ENCC tax assessment
issue your super fund with a release authority to pay the ENCC tax liability amount to us within 10 business days.

If your only fund is a defined benefit fund which is unable or unwilling to release this amount, you will need to pay us the amount yourself.

For more information, see excess contributions tax and how funds report your contributions.

If you don't make a request within 60 days of receiving your determination

If we don't receive your request, we will:

ask your super fund to release excess contributions and 85% of the associated earnings to us within 10 business days of our request to the fund
amend your income tax assessment
pay your tax and / or other Australian Government debts owing
refund the balance to you
issue you with an updated income tax notice of assessment.

Special circumstances

If you exceed your non-concessional contributions cap due to special circumstances, you can apply to the Commissioner for a determination. The Commissioner may make a determination that some or all your contributions are disregarded or allocated to another year.

Applying to have contributions disregarded or reallocated

Complete and send us the Application – excess contributions determination (NAT 71333) form.

Note: You don't have to use our form. You can send us a written statement, but it must include all the information we request in our form.

After completing your application or written statement, either:

fax it to 1300 669 846
lodge through Online services for business or Online Services for agents (your agent can lodge this for you)
mail it to us at
Australian Taxation Office
PO Box 3100
PENRITH NSW 2740

How to make an election

There are 3 ways you can make a request:

Using ATO online services. Log in to ATO online services, select Super, then navigate to Non-concessional election. To make a request, select Lodge. The request form will be available for 120 days after the determination issue date.
Get your tax agent to submit an election on your behalf through Online services for agents.
Complete the excess non-concessional contributions election form and send it to us.

For new users, work out how to use ATO online services.

For existing users, sign in to ATO online servicesExternal Link with my Gov.

If the time frame to make election has expired

You have 60 days to make an election. However, the option to make an election will still be available in our online services for 120 days after the date of issue of the determination.

After 120 days you cannot lodge the election via ATO online services. However, you can:

ask your agent to lodge your election through Online services for agents
complete and lodge the excess non-concessional contributions election form.

When we receive the election form, we will determine if we will accept it.

You should check if we have already started or completed the release process before lodging an election. You can check your election history using ATO online services:

log in to ATO online services
select Super
navigate to Non-concessional election – Election history.

Tips to help avoid exceeding the non-concessional cap

Keep track of amounts and know your contribution caps

Be aware of your non-concessional contributions cap, including any bring-forward arrangements.
Be aware of your total super balance.
Keep track of the amount of non-concessional contributions you, your employer, or others make on your behalf. You can track these contributions in ATO online services (accessed via myGov).
If you have more than one job, or pay money into more than one super fund, include all of them when working out your annual contributions.
If you go over the concessional contributions cap, the excess concessional contributions will count towards your non-concessional contributions cap unless you release them from your super fund.
Any amount you withdraw and re-contribute to your super fund is counted as a non-concessional contribution, unless you have claimed and been allowed a deduction for this amount or it is a re-contribution of COVID-19 early release superannuation amount.
You are only eligible to bring-forward the next 2 years of contributions if you are under 75 years on 1 July of the first financial year (prior to 2022–23 the age was under 67 years; and for 2020–21 financial year and prior years the age was under 65 years) your total super balance on 30 June of the previous financial year is less than $1.48 million (from 1 July 2021).
You can see your bring-forward arrangement information in ATO online services. Be aware that some contributions are reported to us sooner (for example, employer contributions to a large fund) than others (for example, contributions you make to your SMSF).

Check the timing of contributions

Keep track of the amount of non-concessional contributions and when they were received by your super fund. Contributions count towards a cap in the year your super fund receives them.
Make sure your fund receives all your contributions by 30 June, if that is what you intend.
If someone else (such as a financial planner, accountant or employer) makes contributions on your behalf, check that they make the contributions in time to be received in your fund by the end of the financial year if that is what you intend.
If you make contributions by BPAY^®, internet transfer or similar means at the end of the financial year, check the terms and conditions of your financial institution and allow for any possible delays.
Check if your contributions are held in another account or by another institution before they are received by your fund, as this can cause delays.

Last modified: 04 May 2023QC 19749