### Surcharge rates

Before the superannuation contributions surcharge was abolished for the 2005-06 and later financial years, the maximum surcharge rate was gradually reduced to:

• 15% for the financial years 1997-2003
• 14.5% in 2003-04
• 12.5% in 2004-05.

The maximum surcharge rate applies to surchargeable contributions if a person's adjusted taxable income exceeds the higher income amount.

No superannuation contributions surcharge will apply if a person's adjusted taxable income is equal to or below the lower income amount.

Table: Lower income and higher income amounts

 Income year Lower income amount Higher income amount A (divisor used inrate formula) 2005-06 onward Surcharge has been abolished 2004-05 \$99,710 \$121,075 1,709.20000 2003-04 \$94,691 \$114,981 1,399.31034 2002-03 \$90,527 \$109,924 1,295 2001-02 \$85,242 \$103,507 1,219 2000-01 \$81,493 \$98,955 1,165 1999-2000 \$78,208 \$94,966 1,118 1998-99 \$75,856 \$92,111 1,084 1997-98 \$73,220 \$88,910 1,046 1996-97 \$70,000 \$85,000 1,000

If the adjusted taxable income is between the lower income amount and higher income amount, the surcharge rate will be calculated using the following formula:

 Surcharge rate = Adjusted taxable income - lower income amount A

Example

Robert's adjusted taxable income for the 2003-04 financial year was \$103,762. For the same financial year, his accumulation super fund reported that he only received contributions of \$9,000 and that these were employer contributions.

According to the formula above, his surcharge rate will be calculated as follows:

 Rate = \$103,762 - \$94,691 1,399.31034 = 6.48248%

This surcharge rate is applied to Robert's surchargeable contributions to calculate his liability as follows:

 Liability = \$9,000 x 6.48248% = \$583.40

Therefore a surcharge assessment for \$583.40 will be issued to Robert's super fund.

Last modified: 25 May 2015QC 18957