your total super balance at the end of 30 June of the previous financial year must be less than the general transfer balance cap ($1.6 million from 2017–18) with a capacity greater than the annual non-concessional contribution cap ($100,000 from 2017–18). A small business retirement CGT-exempt amount contributed to a super fund can by election can be excluded from the non-concessional contributions cap and counted towards the superannuation CGT cap. This will increase the amount exempted under the retirement exemption, and therefore optimise super contributions using the CGT cap. Non-conc caps from 1 July 2017 These contributions are taxed at 15%. Superannuation Guarantee (SG) contributions, First Home Super Saver Scheme contributions, Beginner’s guide to making super contributions, Your simple guide to Superannuation Guarantee (SG) contributions, How to make super contributions after you’ve retired. Keep track of the amount of contributions and when they were received by your super fund - contributions count towards a cap in the year in which your super fund actually receives the money. At this stage you can either: Elect to pay additional taxes personally. Superannuation and retirement planning information, Home / How super works / Super contributions, July 8, 2020 by Janine Mace Leave a Comment. Super contribution limits 2019-20. It is received by the super fund on 1 July 2020. Any contributions above this cap will incur additional tax. Personal Super Contributions. If you exceed the super contribution caps outlined above, additional tax and penalties may apply. Super is tax smart As an incentive to help Australians save for retirement, super receives tax concessions. $1.6 million + Nil Note: You must select this option if your only super account is in a defined benefit super fund. From 1 July 2018. You should consider whether any information on SuperGuide is appropriate to you before acting on it. Theo has accumulated $750,000 in superannuation, with a 100% taxable component. These are the compulsory contributions made by your employer into your super account as part of your pay. The most common type is personal contributions made by the member for which no income tax deduction is claimed. – For an asset purchased before September 1999 with $500,000 or less gross capital gain, the cost base indexation method can be more favourable than the 50 per cent general CGT discount method to maximise the CGT exempt amount. Ensure you’re familiar with the annual contributions caps. The first thing to remember is not to panic. 2020-21: $1,565,000 What are non-concessional contributions? To make a non-concessional contribution into your super account, you must meet several eligibility criteria: 1. Please contact the developer of this form processor to improve this message. By political reporter Anna Henderson. Excess contributions are the payments you make into your super fund above the contributions caps. Both the employer contributions and the personal concessional contributions are counted towards the $25,000 cap. Leave the excess non-concessional contributions and associate earnings in your super account. When this occurs, you’re charged extra tax, which can be quite high in some cases! Your super statements will detail your concessional contributions, or you can contact your super fund and ask them to confirm the amount for you. It's worth noting that Federal Government contribution caps apply to the amount of contributions you can make into your super and retirement products from 1 July 2017. By political reporter Anna Henderson. $1.5 million to < $1.6 million. The concessional contribution cap is $25,000 each financial year and includes contributions made by your employer and any salary sacrifice contributions. Check with the ATO, as it maintains a record of how much you have contributed into your super account. ¹ The CC cap may be indexed at the start of each financial year. Tips to help you stay below the super contributions cap. Government contributions for low-income earners. Making excess non-concessional (after-tax) contributions during a financial year will result in you having to pay extra tax on amounts over your contributions cap, unless you withdraw them from your super account. Non-concessional (after-tax) contributions, If you have a Total Super Balance of less than $500,000 on 30 June of the, Personal contributions for which you claim a tax deduction, Contributions your spouse makes to your super fund, Excess concessional (before-tax) contributions you have, Retirement benefits you withdraw and re-contribute into your super account (. Required fields are marked *. Overall contribution limits for both concessional and non-concessional contributions were capped at lower levels from 1 July 2017. Learn more, Superguide Pty Ltd ATF Superguide Unit Trust as a Corporate Authorised Representative (CAR) is a Corporate Authorised Representative of Independent Financial Advisers Australia, AFSL 464629, 1. The cap is a limit to how much money you can put into your superannuation as concessional contributions before it is taxed at a higher rate. Theo turned 68 in January 2020 and Kerri turns 66 in August 2020. The concessional contributions cap for 2020/21 is $25,000. It’s up to you – not your super fund or the ATO – to keep track of all the concessional contributions made by both you and your employer into your super account. Learn More{{/message}}. Aged 65 to 74 can only contribute subject to a work test. If you go over the after-tax cap. So what is the cap and what happens if you exceed your super contributions cap? Check if your employer pays costs (such as super administration fees and insurance premiums) on your behalf to your super fund, as these count towards your concessional contributions cap. Please contact the developer of this form processor to improve this message. This requires the individual to be “gainfully employed” for at least 40 hours in a period of not more than 30 consecutive days in the financial year. Super contribution limits 2020-21. Income Averaging For Special Professionals, CGT Withholding From Non-resident Property Sales, Coronavirus JobKeeper Employer Registration (ATO), Adjusted Taxable Income For Offsets Calculations, Delayed Income Tax Offset (income in arrears), Living Away From Home Allowance Fringe Benefit, PAYG Withholding Variation: Tax Free Allowances, Taxable payments reporting – building and construction, cleaning and couriers, road freight, IT, and security, investigation or surveillance services, Early Stage Investment (Innovation) Tax Incentives, Tax Deductions Limited on Non-Compliant Wages, Employment termination – Long Service Leave, Home » Superannuation Contribution Limits 2020-21, On this page: 3 For more information on tax see the Super SA Select Tax fact sheet and Triple S Reference Guide. If you have $1.6 million or more of super assets as at 30 June of the previous financial year, your non-concessional contribution limit is reduced to nil. If you are under 67 years old, you may be able to make non-concessional contributions of up to three times the annual cap … The increased concessional cap for those people aged 50 or over will continue to apply until 30 June 2012. For more information, please visit the ATO website. From 28 days after the end of the month of turning 75 years, personal concessional contributions can no longer be made, only employer contributions and. $100,000. The Government taxes employer and salary sacrifice contributions (if applicable to your circumstances) at a rate of 15% tax. Changes to the Super Contributions Cap. Need to know: Your contributions cap applies to the contribution totals for all your super accounts across different super funds. If your super fund has made a mistake, it is required to correct the records with the ATO and cannot refuse to do so. Your total super balance, as at 30 June of the previous financial year, must be less than $1.6 million. The associated earnings are taxed at your marginal tax rate, less a 15% tax offset for the tax already paid by your super fund on those earnings. However, under the new carry-forward rule you may be able to exceed the annual limit. If you’re on a low income, the government offers two ways to boost your super savings if you’ve made contributions, either as SG or voluntary payments into super. *Unused amounts from 2018-19 can be carried forward to increase your 2019-20 Concessional cap, but only if you have a super balance of less than $500k at the end of 30 June in the previous year. This is also the case with salary-sacrifice payments if the timing of payments is not specified in a salary-sacrifice agreement. 2016-17: $1,415,000 Alex’s salary sacrifices $150 each fortnight into his super account. If you contribute superannuation above the contributions cap, you’ll receive a letter from the ATO identifying the excess contributions. In 2020/21, the SG is 9.5% of your ordinary time earnings (OTE). Non-concessional (after-tax) contributions. You also need to keep an eye on your annual non-concessional contributions. The first step is to stop or reduce any further concessional contributions (like salary-sacrifice payments) if you can, or to delay until the next financial year any personal super contributions you intend to claim as a tax deduction. Even though the server responded OK, it is possible the submission was not processed. In terms of the amount of money that could be contributed, the existing concessional contribution cap of $25,000 and non-concessional contribution cap of $100,000 continues to apply. Boost next year — but coronavirus could send the plan off the rails disposable! 100,000 – but could be more where members use the ‘ bring forward up to $ 300,000 ). 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