Concessional contributions cap
There is a limit on the amount of pre-tax and other concessionally taxed contributions you can make each year to your super.
What are concessional contributions?
Concessional contributions (CCs) are super contributions made before tax is taken out. They include:
- all contributions from an employer (e.g superannuation guarantee and salary sacrifice).
- personal contributions claimed as a tax deduction, and
- certain other amounts, see the Australian Taxation Office (ATO) for more information.
What is the cap in 2019/20?
A cap of $25,000 applies to CCs in the 2019/20 financial year. If you have more than one fund, all CCs made to all funds will be added up and count towards the CC cap.
What happens if you exceed the CC cap?
The ATO will inform you if you have exceeded the CC cap. Contributions exceeding the cap will generally be taxable at your marginal tax rate (less a 15% tax offset) and an interest charge may apply.
Following notification from the ATO, you can withdraw up to 85% of any excess CCs from your super. If you leave the excess in your fund, it will count towards your non-concessional contribution cap.
What if you don’t use up all the CC cap?
From 1 July 2018, if your total super balance is less than $500,000 on the previous 30 June and you make CCs of less than $25,000 p.a, you may be able to accrue unused amounts and make catch-up contributions in subsequent financial years.
Want to know more?
For more information on the CC cap, see the Australian Taxation Office (ATO).
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General advice and information only
Any advice and information on this website is general only, and has been prepared without taking into account your particular circumstances and needs. Before acting on any advice on this website you should assess or seek advice on whether it is appropriate for your needs, financial situation and investment objectives.
Tax disclaimer
Any general tax information on this website is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.
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