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No one wants to pay more tax than required, especially when it is due to unintentional mistakes that could have simply been avoided. This can happen when it comes to making superannuation contributions that exceed contribution caps. A contribution cap sets a limit on the amount of contributions you can make in any one financial year. If you contribute above the cap, you might have to pay extra tax. Superannuation contributions can be separated into two categories — concessional (before-tax) and non-concessional (after-tax). Each category of super contribution is subject to a contributions cap.  This article deals with concessional contributions, including tips to avoid exceeding the concessional contributions cap.

Concessional contributions can include: compulsory contributions or super guarantee paid by your employer, additional employer contributions, any salary sacrifice contributions and administration fees and insurance premiums paid by your employer. Followings are tips to avoid exceeding the concessional contributions cap:

  • Always check when super guarantee contributions are received by your fund;
  • Double check when your employer pays the contributions to your super fund or not;
  • Always check voluntary contributions so you can stop, reduce or delay them when you
    realise you may exceed your concessional contributions cap in a certain financial year;
  • Always check how much contribution you will make before discontinuing or reducing any pre-tax;
  • Accumulate contributions from all employers, where there is more than one employer;
  • Don’t leave it until the last minute of a financial year to make contributions. Let adequate time for payments to be managed by your fund.

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