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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.

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    About concessional contribution caps

    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.

    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).

    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

    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.

    Timing of contributions

    When planning your contributions, including salary-sacrificed amounts, it is important to consider when these contributions are received by your super fund.

    A contribution is counted when the payment is received by your fund, not when the payment is sent.

    Make sure your fund receives all your contributions by 30 June if that is what you intend.

    Be aware that your employer is entitled to make super guarantee contributions for the quarter ending on 30 June by 28 July – that is, in the next financial year.

    If you want salary sacrifice contributions to be received by your fund by 30 June, then make sure your salary sacrifice agreement with your employer includes this instruction.

    You can see contributions information your funds have reported to us by using ATO Online services.

    However, you should know that some contributions are reported to us sooner (for example, contributions your employer makes to a large fund) than other contributions (for example, contributions made to your SMSF or amounts reported by a defined benefit fund).

    Example: fund receives cheque in next financial year

    Suzette salary sacrifices $100 a fortnight. Her employer puts aside the amount each pay. On the last day of the quarter, 30 June, her employer posts a cheque to the super fund. The cheque covers her super guarantee contributions and salary sacrifice amounts.

    It generally takes between 3 to 4 working days for the super fund to receive the cheque. As a result, although the amounts deducted from Suzette’s salary between 1 April and 30 June are sent on 30 June, the contribution is not received by the super fund until the next financial year.

    This contribution will count towards Suzette's concessional contributions cap for the following year.

    End of example

    More information:

    Self-managed super fund members

    If you are a member of a self-managed superannuation fund (SMSF), you may be able to make a concessional contribution in one financial year and have it count towards your concessional contributions cap in the following financial year.

    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.

    You and your SMSF will need to meet several requirements and you will need to lodge a Request to adjust concessional contributions form.

    Working out your concessional contributions cap

    From 1 July 2021, the general concessional contributions cap is $27,500 for a financial year, in line with increases in average weekly ordinary time earnings (AWOTE).

    Table 1: General concessional contributions caps from 2017–18 onwards

    Financial year

    General concessional
    contributions cap

    2022–23

    $27,500

    2021–22

    $27,500

    2019–20

    $25,000

    2018–19

    $25,000

    2017–18

    $25,000

    Before 1 July 2017, your concessional contributions cap was dependent on your age. This is no longer the case.

    However, from 2019–20 your concessional contributions cap can be increased if you meet all these conditions.

    You:

    • have a total super balance of less than $500,000 at the end of 30 June of the previous financial year
    • make concessional contributions in the financial year that exceed your general concessional contributions cap
    • have unused concessional contributions cap amounts from up to 5 previous years (but not before 2018–19).

    If you meet these conditions, you can make concessional contributions above the general cap without paying extra tax.

    How to view your concessional contributions cap information

    You can view and manage your concessional contributions and carry-forward concessional contributions using ATO online services (accessed via myGov).

    Log in to ATO online services, select Super, then navigate to Concessional contributions.

    Be aware that due to the reporting timeframes of funds, especially SMSFs, the latest information may not be available in ATO online services. You can contact your super fund to get the most up to date information.

    New ATO online services users can find more information by visiting, Get started with myGov and ATO online services.

    Existing ATO online services users can log into ATO online servicesExternal Link.

    Carry forward unused concessional contributions

    From 2019–20, carry forward rules allow you to make extra concessional contributions – above the general concessional contributions cap – without having to pay extra tax.

    The carry forward arrangements involve accessing unused concessional cap amounts from previous years. An unused cap amount occurs when the concessional contributions you made in a financial year were less than your general concessional contributions cap.

    Example: carry forward concessional contributions (one year)

    Anna's concessional contribution cap for the 2019–20 year is $25,000. Concessional contributions during that year, including her employer's SG payments, were $15,000. Anna's total super balance for the previous financial year was $328,000.

    In January 2021, she receives a company bonus of $10,000 which, as part of a valid salary sacrifice agreement is paid into her super. Anna knows that she also will earn more in 2020–21 and that her employer contributions and her other salary sacrifice contributions will add up to $25,000 (the general concessional contributions cap).

    However, as Anna has $10,000 worth of unused concessional cap amounts from 2019–20 she will not exceed her cap for the 2020–21 year

    End of example

    To use your unused cap amounts you need to meet 2 conditions:

    • your total super balance at the end of 30 June of the previous financial year is less than $500,000
    • you made concessional contributions in the financial year that exceeded your general concessional contributions cap.

    The amount of unused cap amounts you can carry forward will depend on the amount you have contributed in previous years, starting from 2018–19. You can use caps from up to 5 previous financial years, including when you were not a member of a super fund.

    The oldest available unused cap amounts are used first. For example, unused cap amounts from 2018–19 would be applied to increase your cap first before unused cap amounts from 2019–20.

    Unused cap amounts are available for a maximum of 5 years and will expire after this. For example, a 2018–19 unused cap amount that is not used by the end of 2023–24 will expire.

    If, after applying all your available unused cap amounts, you still have excess concessional contributions, you may need to pay extra tax.

    Division 293 tax

    For Division 293 tax purposes, we count your concessional contributions but not your excess concessional contributions.

    If your concessional contributions cap has increased due to the use of unused cap amounts, and your combined income and concessional contributions are above the Division 293 threshold, you would have to pay, or pay a higher amount of, Division 293 tax.

    How to view your carry forward concessional contributions

    You can view and manage your concessional contributions and carry-forward concessional contributions using ATO online services through myGov.

    Log in to ATO online services, select Super, then navigate to Carry forward concessional contributions.

    Be aware that due to the reporting timeframes of funds, especially SMSFs, the latest information may not be available in ATO online services. You can contact your super fund for the most up to date information.

    More information:

    Example: carry forward concessional contributions – Sam (multiple years)

    Sam's concessional contributions cap is $25,000 per year.

    Because Sam and his employer have been making smaller contributions each year (less than his $25,000 cap) he has accumulated unused caps he can access for up to 5 years.

    He was not able to make additional contributions until 2021–22 but there are rules that determine what he can contribute.

    Working out Sam's super contributions cap amounts
    Working out Sam's super contributions cap amounts

    Contributions from Sam and his employer 2018–19

    TSB at end of previous financial year

    Unused concessional cap accumulation

    $5,000 super guarantee (SG)

    $480,000 and growing

    $25,000
    − $5,000
    $20,000

    Sam's options:

    • Sam has no money to contribute.

     

    Contributions from Sam and his employer 2019–20

    TSB at end of previous financial year

    Unused concessional cap accumulation

    $3,000 SG

    $490,000 and growing

    $20,000
    + $22,000
    ($25,000
    − $3,000)
    $42,000

    Sam's options:

    • Sam has no money to contribute.

     

    Contributions from Sam and his employer 2020–21

    TSB at end of previous financial year

    Unused concessional cap accumulation

    $0

    $505,000

    $42,000
    + $25,000
    = $67,000

    Sam's options:

    • Sam has money to contribute but can’t carry forward the unused cap amounts because his TSB is over $500,000.

    Contributions from Sam and his employer 2021–22

    TSB at end of previous financial year

    Unused concessional cap accumulation

    $10,000 SG
    + $20,000 salary sacrifice
    + $15,000 personal contributions
    = $45,000

    $490,000
    Fund experiences negative earnings leading to a decline in Sam's TSB

    $67,000
    + $27,500
    $94,500

    Sam's options:

    • Sam has money to contribute because his TSB at 30 June 2021 is now less than $500,000, he can use the unused cap amounts and contribute up to $94,500.

    Example: carry forward concessional contributions – Bailey (unused cap expiry)

    At the start of 2024–25, Bailey:

    • is planning on making extra concessional contributions to his super fund
    • knows that there is an annual general concessional contribution cap of $27,500
    • knows he can access unused cap amounts from up to 5 previous years.

    He uses ATO online services to check the amounts of his:

    • concessional contributions at the start of 2024–25
    • unused carry-forward concessional contribution caps.

    He also contacts his super fund to check he has the most up to date information.

    Now Bailey can work out how much he can contribute during 2024–25 without having to pay extra tax.

    Bailey can go ahead with his plan if at the end of the 2023–24 year his TSB is less than $500,000.

    Bailey's concessional contributions cap amounts – 2018–19 to 2023–24

    Financial year

    Contributions

    Bailey's options

    2018–19

    • Concessional contributions made during the year: $20,000
    • General concessional contributions cap: $25,000
    • Unused concessional contributions cap for the year: $5,000
    • Cumulative unused cap available to carry forward to next year: $5,000

     

    Bailey has no money to contribute

    2019–20

    • Concessional contributions made during the year: $15,000
    • General concessional contributions cap: $25,000
    • Unused concessional contributions cap for the year: $10,000
    • Cumulative unused cap available to carry forward to next year: $15,000

     

    Bailey has no money to contribute

    2020–21

    • Concessional contributions made during the year: $0
    • General concessional contributions cap: $25,000
    • Unused concessional contributions cap for the year: $25,000
    • Cumulative unused cap available to carry forward to next year: $40,000

     

    Bailey is not working

    2021–22

    • Concessional contributions made during the year: $10,000
    • General concessional contributions cap: $27,500
    • Unused concessional contributions cap for the year: $17,500
    • Cumulative unused cap available to carry forward to next year: $57,500

     

    Bailey has no money to contribute

    2022–23

    • Concessional contributions made during the year: $15,000
    • General concessional contributions cap: $27,500
    • Unused concessional contributions cap for the year: $12,500
    • Cumulative unused cap available to carry forward to next year: $70,000

     

    Bailey has no money to contribute

    2023–24

    • Concessional contributions made during the year: $24,000
    • General concessional contributions cap: $27,500
    • Unused concessional contributions cap for the year: $3,500
    • Cumulative unused cap available to carry forward to next year: $68,500.  
      • This is made up of $65,000 cumulative unused cap from 2019–20 to 2022–23 + $3,500 unused cap for 2022–23.
      • The unused cap of $5,000 from 2018–19 cannot be used in 2024–25.
       

     

    Bailey has no money to contribute in 2023–24.

    Bailey can contribute up to $96,000 in 2024–25 if his TSB is less than $500,000 at the end of 2023–24:

    $68,500 cumulative unused cap

    + $27,500 general cap for 2024–25

     

    Example: carry forward concessional contributions – Sean (no prior super)

    At the start of 2021–22, Sean:

    • secures his first job
    • becomes a member of a super fund and his super fund starts receiving his first super guarantee (SG) contributions from his employer
    • is planning on making extra concessional contributions to his super fund
    • knows that there is an annual general concessional contribution cap of $27,500
    • knows he can access unused cap amounts from up to 5 previous years (starting from 2018–19)
    • knows he has a total super balance (TSB) less than $500,000 at the end of the 2020–-21 financial year (has a nil TSB).

    If Sean’s employer contributes $8,000 of SG in 2021–22, then Sean could contribute $94,500 extra concessional contributions (3 x $25,000 + $27,500 less $8,000) if he has sufficient assessable income.

    During the 2021–22 financial year, Sean arranges with his employer to make salary sacrifice contributions of $22,000. His total concessional contributions are $30,000 ($22,000 + $8,000) and he uses $2,500 of the cumulative unused cap amount ($30,000 contributions less $27,500 general cap = $2,500). Sean does not exceed his cap in this year.

    Sean's concessional contributions cap amounts – 2018–19 to 2021–22

    Financial year

    Contributions

    Sean's options

    2018–19

    • Concessional contributions made during the year: $0
    • General concessional contributions cap: $25,000
    • Unused concessional contributions cap for the year: $25,000
    • Cumulative unused cap available to carry forward to next year: $25,000

     

    Not working

    2019–20

    • Concessional contributions made during the year: $0
    • General concessional contributions cap: $25,000
    • Unused concessional contributions cap for the year: $25,000
    • Cumulative unused cap available to carry forward to next year: $50,000

     

    Not working

    2020–21

    • Concessional contributions made during the year: $0
    • General concessional contributions cap: $25,000
    • Unused concessional contributions cap for the year: $25,000
    • Cumulative unused cap available to carry forward to next year: $75,000

     

    Not working

    2021–22

    • Concessional contributions made during the year: $30,000 ($8,000 SG + $22,000 salary sacrifice)
    • General concessional contributions cap: $27,500
    • Unused concessional contributions cap for the year: $0
    • Cumulative unused cap available to carry forward to next year: $75,500 ($75,000 + $27,500 − $30,000)

     

    Can contribute up to $102,500:

    $75,000 cumulative unused cap

    + $27,500 general cap for 2021–22

    Sam makes salary sacrifice of $22,000.

     

    Example: carry forward concessional contributions – Emma (maternity leave)

    At the start 2023–24, Emma:

    • returns to work following maternity leave of 12 months
    • is planning on making extra concessional contributions to her super fund
    • knows there is an annual general concessional contribution cap of $27,500
    • knows she can access unused cap amounts from up to 5 previous years (starting from 2018–19)
    • knows she has a total super balance (TSB) less than $500,000 at the end of 2022–23.

    If Emma’s employer contributes super guarantee (SG) of $10,000 in 2023–24, then Emma could contribute $112,500 extra concessional contributions ($122,500 less $10,000: see table below) if she has sufficient assessable income.

    During the 2023–24 financial year, Emma arranges with her employer to make salary sacrifice contributions of $30,000. Her total concessional contributions are $40,000 ($30,000 + $10,000) and she uses $12,500 of the cumulative unused cap amount ($40,000 contributions less $27,500 general cap = $12,500). Emma does not exceed the cap in this year.

    Emma's concessional contributions cap amounts – 2018–19 to 2023–24

    Financial year

    Contributions

    Emma's options

    2018–19

    • Concessional contributions made during the year: $8,000
    • General concessional contributions cap: $25,000
    • Unused concessional contributions cap for the year: $17,000
    • Cumulative unused cap available to carry forward to next year: $17,000

     

    Working, SG contributed by employer

    2019–20

    • Concessional contributions made during the year: $8,500
    • General concessional contributions cap: $25,000
    • Unused concessional contributions cap for the year: $16,500
    • Cumulative unused cap available to carry forward to next year: $33,500

     

    Working, SG contributed by employer

    2020–21

    • Concessional contributions made during the year: $8,500
    • General concessional contributions cap: $25,000
    • Unused concessional contributions cap for the year: $16,500
    • Cumulative unused cap available to carry forward to next year: $50,000

     

    Working, SG contributed by employer

    2021–22

    • Concessional contributions made during the year: $10,000
    • General concessional contributions cap: $27,500
    • Unused concessional contributions cap for the year: $17,500
    • Cumulative unused cap available to carry forward to next year: $67,500

     

    Working, SG contributed by employer

    2022–23

    • Concessional contributions made during the year: $0
    • General concessional contributions cap: $27,500
    • Unused concessional contributions cap for the year: $27,500
    • Cumulative unused cap available to carry forward to next year: $95,000

     

    On maternity leave, no SG contributed

    2023–24

    • Concessional contributions made during the year: $40,000 ($10,000 SG +$30,000 salary sacrifice)
    • General concessional contributions cap: $27,500
    • Unused concessional contributions cap for the year: $0
    • Cumulative unused cap available to carry forward to next year: $78,000  
      • $16,500 + $16,500 + $17,500 + $27,500 + $0
      • $12,500 comes off the unused cap for 2018–19 and the remaining unused cap from that year cannot be carried forward to 2024–25.
       

     

    Can contribute up to $122,500 ($95,000 cumulative unused cap + $27,500 general cap for 2023–24). Emma makes salary sacrifice of $30,000.

     

    End of example
      Last modified: 11 Jul 2022QC 19749