The contribution limits or caps have changed multiple times in recent years. Again in 2013/14 Financial Year there have been more changes with additional changes expects in the 2014/15 Financial Year. So how does the average person keep up?

Firstly, there are two types of contributions:

  • Concessional contributions – payments made to your super fund from your employer, through salary sacrificing or where a tax deduction has been claimed for a super contribution. Concessional contributions are taxed at 15% in super and have gone into super before being taxed at your marginal rate. The caps are detailed in the table below:
Financial Years Caps for those aged 59 or over on 30 June 2013 Caps for those aged 49 or over on 30 June 2014 Cap for all others
2013/14 $35,000 $25,000 $25,000
2014/15 $35,000 $35,000 $25,000
  •  Non-concessional contributions – payments made into super from after-tax dollars. These types of contribution may enable you to receive the Government Co-Contribution.

The maximum that can be contributed into super is $150,000 per year. If you’re older than age 65 you must meet the works test to be able to contribute. If you are under the age of 65 than you can contribute up to $450,000 over a rolling three year period.

Excess Contributions

Recent changes to superannuation have relaxed the excess concessional contributions tax. From the2013/14 Financial Year any excess concessional contributions tax will be taxed at an individual’s marginal tax rate plus and excess contributions charge and a shortfall interest charge. These contributions can be refunded.

One area that you must remain extremely wary of is excess non-concessional contributions. Excess contributions are taxed at 45%. This is money that has already been taxed at your marginal tax rate. Therefore, the cost of an excess contribution could be as high as 71%.

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Thomas Jacks BCom (Acc), SMSF SpecialistTM, Adv. Dip F.S. (FP)
“I want to be able to assist clients with their investment and retirement planning by providing real strategy advice. It’s my aim to not only help my clients but to educate them by addressing the entire picture” Google Plus

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