• Excess concessional contribution charge

    The excess concessional contributions (ECC) charge is applied to the additional income tax liability arising due to excess concessional contributions included in your income tax return. The intent of the ECC charge is to acknowledge that the tax is collected later than normal income tax. The charge is payable for the year a person makes excess concessional contributions and applies from the 2013–14 income year onwards.

    The ECC charge period is calculated from the start of the income year in which the excess concessional contributions were made and ends the day before the tax is due to be paid under your first income tax assessment for that year.

    The formula for calculating the ECC charge uses a base interest rate for the day plus an uplift factor of 3%. The base interest rate is the monthly average yield of 90-day Bank Accepted Bills published by the Reserve Bank of Australia.

    This compounding interest formula is applied against the base amount (the additional income tax liability) for each day of the ECC charge period.

    The ECC charge rates are updated quarterly and listed in the table below.

    Table 3: Excess concessional contribution charge rates

    Quarter

    Annual rate

    Daily rate

    July - September 2017

    4.73%

    0.012958904109589%

    April - June 2017

    4.78%

    0.013095890410959%

    January - March 2017

    4.76%

    0.013041095890411%

    October – December 2016

    4.76%

    0.013005464480874%

    July – September 2016

    5.01%

    0.013688524590164%

    April – June 2016

    5.28%

    0.014426229508197%

    January – March 2016

    5.22%

    0.014262295081967%

    October – December 2015

    5.14%

    0.014082191780822%

    July – September 2015

    5.15%

    0.014109589041096%

    April – June 2015

    5.36%

    0.014684931506849%

    January – March 2015

    5.75%

    0.015753424657534%

    October – December 2014

    5.63%

    0.015424657534247%

    July – September 2014

    5.69%

    0.015589041095890%

    April – June 2014

    5.63%

    0.015424657534247%

    January – March 2014

    5.59%

    0.015315068493151%

    October – December 2013

    5.60%

    0.015342465753425%

    July – September 2013

    5.82%

    0.015945205479452%

    See also:

    Non-concessional contributions cap

    Non-concessional contributions include personal contributions for which you do not claim an income tax deduction.

    If you have more than one fund, all non-concessional contributions made to all of your funds are added together and counted towards the non-concessional contributions cap.

    Table 4: Non-concessional contributions cap

    Income year

    Amount of cap

    2017–18

    $100,000 *conditions apply

    2016–17

    $180,000

    2015–16

    $180,000

    2014–15

    $180,000

    2013–14

    $150,000

    2012–13

    $150,000

    2011–12

    $150,000

    2010–11

    $150,000

    2009–10

    $150,000

    2008–09

    $150,000

    2007–08

    $150,000

    The non-concessional cap for an income year is a multiple of the concessional contributions cap.

    If you are under 65, you may be able to make non-concessional contributions of up to three times the annual non-concessional contributions cap in a single year. If eligible, when you make contributions greater than the annual cap, you automatically gain access to future year caps. This is known as the ‘bring-forward’ option.

    If you enter a bring forward arrangement in either the 2012-13 or 2013-14 financial year you will be locked into a $450,000 cap over 3 years; however in the 2014-15 financial year your bring forward cap is $540,000.

    From 1 July 2017 the bring-forward amount and period is dependent on your total superannuation balance on the day before the financial year contributions that trigger the bring forward.

    Transitional period transitional arrangements apply if you triggered a bring forward in either the 2015–16 or 2016–17 financial years. If you have triggered a bring forward before 1 July 2017 and you have not fully utilised your bring-forward cap before 1 July 2017, your cap will be reassessed on 1 July 2017 to reflect the new annual cap.

    During the transitional periods (highlighted in the following table), contributions made prior to 1 July 2017 will affect your total non-concessional contributions capacity over the following two years.

    During the transitional periods, contributions made prior to 1 July 2017 will affect your total non-concessional contributions capacity over the following two years.

    Associated earnings rate (for excess non-concessional contributions)

    Individuals have the option of electing to release non-concessional superannuation contributions made from 1 July 2013 which are in excess of the non-concessional contributions cap for 2013–14 and future income years.

    An associated earnings amount is calculated to approximate the amount earned from the excess non-concessional contributions while they were held in the superannuation fund. This is included in the individual’s assessable income.

    Table 5: Associated earnings rates

    Income year

    Annual rate

    Associated earnings rate / daily rate

    2016-17

    8.83%

    0.02419178%

    2015–16

    9.20%

    0.02513661%

    2014–15

    9.61%

    0.02632876%

    2013–14

    9.66%

    0.02646575%

    See also:

    Transitional arrangement for the non-concessional contributions cap between 10 May 2006 and 30 June 2007

    Between 10 May 2006 and 30 June 2007 you could contribute up to $1 million of non-concessional contributions to your super fund. This limit was referred to as the transitional non-concessional contributions cap. If you had more than one fund, all non-concessional contributions made to all your funds were added together and counted towards the cap.

    However, the following contributions were excluded from the $1 million transitional non-concessional contributions cap:

    • contributions arising from personal injury payments
    • up to $1 million of contributions derived from the disposal of certain small business assets – these contributions were subject to the capital gains tax (CGT) cap.

    See also:

    Last modified: 28 Jun 2017QC 18123