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The government limits how much you can contribute before-tax. If you contribute too much, you may have to pay extra tax. These limits are known as contribution caps. |
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The caps for 2020-21 financial year on before-tax contributions for any age is $25,000 per year (including Superannuation Guarantee contributions made by your employer).1 If you want to know the details, visit rest.com.au/super/understanding-super/facts-and-figures or visit the ATO’s website for more information. |
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From 1 July 2019, if your total super balance is less than $500,000 on 30 June of the previous financial year, you may be able to contribute over this cap by using any unused cap. This is called a ‘carry forward’ contribution’. You can use the carry forward unused amounts from 1 July 2018, for up to five years. |
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For example, if you are eligible and make a before-tax contribution of $20,000 in 2018-19 and 2019-20. This means you’ll have an unused cap amount of $10,000 for those financial years. So in 2020-21 you’ll be able to make a carry forward before-tax contribution of $35,000 (the cap of $25,000 plus the unused $10,000 from your previous year’s caps combined). Any carry forward amounts you accrue will expire if you don’t use them after five years. |
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Generally, your before-tax contributions (or concessional contributions) are taxed at 15%. However, a higher rate of tax may be payable if your income and before-tax contributions are more than $250,000 in a financial year. |
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If you go over the caps, you will pay extra tax equivalent to your marginal tax rate on the excess contributions (less the 15% tax already paid). The excess amount will then be counted as an after-tax contribution. You also have the option of withdrawing the excess amount out of your account. The Australian Tax Office (ATO) will send you information on your options. For more information, visit the ATO website. |
