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The tax laws limit the amount of money you can voluntarily contribute to your super account on a concessional basis. This is achieved by setting the superannuation contribution limits (caps) which operate to ration the tax benefits available each year. There is no limit to how much super you is allowed to accumulate, but there is a limit to the tax concessions you can receive on each year’s contributions.
Making contributions over the limits results in additional tax payable, and excess concessional contributions are counted towards the non-concessional cap. The contribution caps limit the amount that can be contributed for a member each financial year. The caps are indexed annually. A member whose total contributions in a year exceed the contribution caps may be liable for additional tax on the excess contributions.
Concessional Contributions Caps
Concessional contributions include your employer’s compulsory Superannuation Guarantee (SG) contributions, your salary-sacrificed contributions, or any contributions claimed as a tax deduction. Under the superannuation rules, the concessional cap is indexed in line with movements in average wages, and increases in $5,000 increments. Concessional contributions are essentially those contributions which are tax deductible, and include employer contributions and personal contributions claimed by the self-employed.
Non-Concessional Contributions Caps
Generally speaking, non-concessional contributions are voluntary contributions not claimed as an income tax deduction by you, or your employer. The non-concessional (after-tax) contributions cap increased to $180,000 for the 2014/2015 year, compared with the lower $150,000 for the 2013/2014 year. The non-concessional contributions cap remains at $180,000 for the 2015/2016 year. Non-concessional contributions are essentially contributions not claimed as a tax deduction. Each tax year, the non-concessional cap is a multiple of the indexed concessional cap.
Non-concessional contributions also include excess concessional contributions for the ﬁnancial year. They do not include super co-contributions, structured settlements and orders for personal injury or capital gains tax (CGT) related payments that the member has validly elected to exclude from their non-concessional contributions.