Caps apply to contributions made by, or for the benefit of, fund members and any contributions made over the caps are subject to extra tax. The caps and how much extra tax a member may need to pay on amounts over the cap depends on whether the contributions are concessional (before-tax) or non-concessional (after-tax).
A person’s concessional contributions cap depends on their age as set out in the following table:
Income year Cap for those turning age 60 or over in 2013-14 Cap for those turning age 50 or over in 2014-15 Cap for everyone else
2014–15
$35,000
$35,000
$30,000
2013–14
$35,000
$25,000
$25,000
Concessional contributions made to a super fund in a financial year include:
most employer contributions such as compulsory super guarantee
amounts members salary sacrifice to their super
amounts for which an income tax deduction is allowed
certain other amounts included in the assessable income of the super fund.
More about concessional contributions can be read here.
From 1 July 2013, if a member exceeds their concessional cap, the amount over the cap will be included in their assessable income and taxed at their marginal tax rate plus any applicable excess concessional contributions (ECC) charge. The ECC charge is applied to any extra tax payable as a result of excess concessional contributions being included in a member’s assessable income. The ECC charge is intended to negate any tax advantage a member may obtain by exceeding the excess concessional contributions cap, such as the benefit of having the tax collected later than normal income tax. The ATO will apply a 15% tax offset to account for the contributions tax that has already been paid by the super fund. This will be issued to the member on an income tax Notice of Assessment or income tax Notice of Amended Assessment.
There are no changes to the non-concessional cap rules. The non-concessional contributions cap for 2013-14 remains at $150,000. Members aged 64 or under on 1 July can bring forward future entitlements to the next two years of their non-concessional contributions cap, but conditions apply.