Superannuation rates and thresholds

Concessional contributions include employer contributions (eg. Superannuation Guarantee and contributions made under a salary sacrifice arrangement) and personal contributions claimed as a tax deduction by a self-employed or other eligible person.

From 1 July 2013, if you exceed your concessional cap, your excess concessional contributions will be included in your assessable income and are subject to your marginal rate of tax plus an interest charge. The excess contributions are eligible for a 15% tax offset, to allow for the 15% contributions tax already deducted from the super contribution upon entry to the super fund. You can choose to withdraw part or up to 85% of the excess contributions to help pay the higher amount of income tax.  You can do this by filling out the excess concessional contributions election form, which provides a release authority to the fund. Alternatively, you can choose to retain the excess concessional contributions within your super account, and pay the extra income tax from your personal savings. If you do choose to retain the excess contributions within your super account, the excess amount will count towards your non-concessional cap.

From 1 July 2018, if you have a total superannuation balance of less than $500,000 at the end of 30 June of the previous financial year, you may be entitled to contribute more than the general concessional contributions cap using the carried-forward amounts of your unused concessional contributions. The first year you will be entitled to carry forward any unused amounts is the 2019-2020 financial year. Unused amounts are available for a maximum of five years, and will expire after this. For Example, if in the 2018-19 financial year the cap is $25,000 and you contribute $15,000, you will be able to carry forward the unused $10,000 for the next 5 years (if your total superannuation balance is less than $500,000) on the prior 30 June year end.

Non-concessional contributions include personal after-tax contributions for which you do not claim an income tax deduction.

Annual Cap

The non-concessional cap for an income year is a multiple of the concessional contributions cap.

If you are under 65, you may be able to make non-concessional contributions exceeding the annual non-concessional contributions cap in a single year by bringing forward the caps applying in the subsequent two years. If eligible, when you make contributions greater than the annual cap, you automatically gain access to future year caps. This is known as the ‘bring-forward’ option.

From 1 July 2017, the annual caps reduce to $100,000. Transitional arrangements apply if you triggered a bring forward in either the 2015–16 or 2016–17 financial years. If you have triggered a bring forward before 1 July 2017 and have fully utilised the bring-forward cap before 1 July 2017 by eg. making a single non-concessional contribution of $540,000 (3 x $180,000) in 2016-17, you will not have breached the contribution caps, but you wont be able to make any more contributions until 1 July 2019. If you have triggered a bring forward before 1 July 2017 and you have not fully utilised your bring-forward cap before 1 July 2017, your cap will be reassessed on 1 July 2017 to reflect the new annual caps – this will affect the non-concessional contributions you can make after 1 July 2017.

Further, from 1 July 2017, the government will introduce a new constraint so individuals with a balance of $1.6 million or more (on 30 June of the previous financial year) will no longer be eligible to make non-concessional contributions. There will also be limits on  accessing the non-concessional bring forward arrangement.

Excess non-concessional contributions

For any excess contributions made after 1 July 2013 breaching the non-concessional cap, the Government will allow individuals to withdraw those excess contributions and associated earnings. If an individual chooses this option, no excess contributions tax will be payable and any related earnings will be taxed at the individual’s marginal tax rate. For further information, please contact the ATO.

The Super Co-contribution is a government contribution to assist eligible individuals to save for their retirement. If you are eligible and make personal super contributions, the government will match your contribution with a Super Co-contribution up to certain limits. To receive a Co-contribution you must be earning less than the Higher Income Threshold. To receive the maximum Co-contribution you must be earning no more than the Lower Income Threshold. If you earn in between the two thresholds, you may be able to receive a limited Co-contribution.

There are other criteria you must meet to be eligible for the Super Co-contribution – for further information please visit the ATO website.

Co-contribution Income Thresholds

From 1 July 2012, the Government will provide a new super contribution of up to $500 annually for anyone earning up to $37,000 p.a. The low income superannuation contribution (LISC) will effectively refund the 15% tax they have paid on their SG contributions.

The Government has announced those eligible for the LISC won't need to lodge a tax return to receive their contribution and the first payments will be made in the 2013-14 income year. The Australian Tax Office (ATO) will use available information to determine an individual's eligibility.
Individuals will need to meet a test where at least 10% of their income must be from employment or business sources and they are a resident of Australia or New Zealand.

Note: The payment of LISC has been maintained in respect of concessional contributions made up to and including 30 June 2017. Payment of LISC will cease in respect of concessional contributions made on or after 1 July 2017. However as announced in the 2016-17 Federal Budget, the Low Income Superannuation Tax Offset (LISTO) will be introduced from 1 July 2017 and will replace LISC.

Low income superannuation tax offset

From 1 July 2017, the government will introduce the low income superannuation tax offset (LISTO) to assist low income earners to save for their retirement.

If you earn an adjusted taxable income up to $37,000 you may be eligible to receive a refund into your superannuation account of the tax paid on your eligible concessional superannuation contributions, up to a cap of $500.

You don't need to apply for LISTO. If you're eligible and your fund has your tax file number (TFN), we will pay it to your fund account automatically.

Since 1 July 2003, employers have been required to contribute a percentage of an employee’s earnings to a superannuation fund under the superannuation guarantee (SG) law. Recent changes to legislation saw the superannuation guarantee increase from 1 July 2013. In line with the repeal of the Minerals Resource Rent Tax, the proposed schedule for the increase is as follows:

The maximum super contribution base is used to determine the maximum limit on any individual employee's earnings base for each quarter of any financial year.If an employee earns more than the amount shown below in a quarter for the relevant financial year, the employer is not obligated to pay superannuation guarantee contributions on the excess above that amount in that quarter.

For members aged between 55 and 60, the taxed element of the taxable component of a superannuation lump sum up to the Low rate cap is taxed at a lower (or nil) rate of tax. Amounts exceeding the low rate cap are taxed at 15% plus the Medicare levy. The low rate cap only applies once a member has reached their preservation age currently between the age 55 and age 60 depending upon a person’s date of birth.

Under certain circumstances, the proceeds of the sale of small business and assets contributed to superannuation might not count towards the concessional and non-concessional contribution caps. Provided certain conditions are satisfied, these additional amounts may count towards a separate cap (CGT cap) instead. The CGT cap amount is a lifetime limit. The CGT cap amount applies to all qualifying CGT contributions.

The excess concessional contributions (ECC) charge is applied to the additional income tax liability arising as a result of having excess concessional contributions included in your income tax return. The intent of the ECC charge is to acknowledge that the tax is collected later than normal income tax. The charge is payable for the year a person makes excess concessional contributions and applies from the 2013–14 income year onwards.

The ECC charge period is calculated from the start of the income year in which the excess concessional contributions were made and ends the day before the tax is due to be paid under your first income tax assessment for that year.

The formula for calculating the ECC charge is provided for under section 4 of the Superannuation (Excess Concessional Contributions Charge) Act 2013. It uses a base interest rate for the day plus an uplift factor of 3%. The base interest rate is defined under section 5 of the same Act and is the monthly average yield of 90-day Bank Accepted Bills published by the Reserve Bank of Australia.

This compounding interest formula is applied against the base amount (the additional income tax liability) for each day of the ECC charge period

From 1 July 2012, Division 293 tax will be applied to certain super contributions to reduce the concessional tax treatment of those contributions made for very high income individuals.

The high income threshold is:
 

An individual's income is added to certain super contributions and compared to the high income threshold. Division 293 tax is payable on the excess over the threshold, or on the super contributions, whichever is less. The rate of Division 293 tax is 15%.

Division 293 tax is not payable on excess concessional contributions that have been taxed under Division 292 (or refunded under section 292-467).

Generally, you must reach preservation age before you can access your super. Use the following table to work out your preservation age.

Once you start a pension or annuity on or after 1 July 2007, a minimum amount is required to be paid each year. There is no maximum amount other than the balance of your super account, unless it is a transition to retirement pension in which case the maximum amount is 10% of the account balance.

The minimum payment amounts have been halved for certain pensions and annuities for the 2008–09, 2009–10 and 2010–11 years and reduced by 25% for the 2011–12 and 2012–13 years. The reductions in these years apply only to account-based pensions and annuities (allocated pensions and annuities and market-linked pensions and annuities).

The information on this page has been sourced from the Australian Taxation Office.