The Government encourages people to put money into super by taxing super at a lower rate than other investments. That’s why it’s a great way to save for your retirement. To ensure people don’t misuse this tax break, the Government limits how much people can put into super in any one year and still receive tax concessions. These limits are called contribution caps. 

Changes from 1 July 2021

• Before-tax contributions: The limit or cap on how much before-tax money you can contribute will go up from $25,000 to $27,500 pa. Remember, if you have less than $500,000 in super on 30 June of the previous financial year, and haven’t used all your annual before-tax contribution cap over the previous five years, you can make catch up contributions using unused cap amounts. As this initiative started in the 2018-19 financial year, the full five years of catch up contributions will only be available in the 2023-24 financial year.
• After-tax contributions: The limit or cap on how much after-tax money you can contribute to super and have earnings on this amount taxed at the low super tax rate, will go up from $100,000 to $110,000 pa or $330,000 over three years if you’re under age 65.
• Transfer balance cap: The transfer balance cap will increase from $1.6 million to $1.7 million. This is the amount of super that you can transfer into the retirement phase (e.g. a pension account).
• Government co-contribution: If you have a low income and add after-tax money to your super, the Government may help grow your super faster by paying a co-contribution into your super account. The amount you may receive is based on your income and how much you add to your super. For the 2021-22 financial year, your income needs to be between $41,112 and $56,112 pa.

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