There are limits on how much you can pay into your super fund each financial year without having to pay extra tax. These limits are called ‘contribution caps’.
How much you can contribute to your super fund and whether your fund is allowed to accept your contribution may also depend on your age and total superannuation balance.
Contribution caps apply to all super funds. If you have more than one super fund, all your contributions are added up and count towards your caps.
If you exceed these caps, you may need to pay extra tax. You can avoid this by knowing about your own contribution caps.
For more information, see Super contribution caps.
Understanding the types of contributions
There are 2 types of contributions you (or others) can make into your super fund:
- Concessional – These contributions come from income that has not yet been taxed. They are also called ‘before tax’ contributions. Once the concessional contributions are in your super fund, they are taxed at a rate of 15%. You may need to pay extra tax if you exceed the concessional contribution cap.
- Non-concessional – These contributions come from income that has already been taxed. They are also called ‘after tax’ contributions. These contributions are not taxed once received by your super fund. However, you may pay tax on them if you exceed your non-concessional contribution cap.
If you would like assistance getting your accounts under control as we approach the end of financial year, call us today on 1300 79 80 38.
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Author: Pat Casey – Managing Director & Financial Planner Sydney – Assure Wealth
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Disclaimer: The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Walker Lane Pty Ltd Adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Walker Lane nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.
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