The government limits how much you can add to your super each year and still receive tax concessions. These limits are called contribution caps.
There are two types of payments you can make to your super. How much you can add to your super account each year depends on the type of payment you’re making.
Before tax payments
Contribution cap: $30,000 pa for people aged 49 and under and $35,000 pa for people aged 50 and over.
This is money you put into your super before any tax is taken out. Before tax payments include compulsory 9.5% employer contributions and any salary sacrifice payments your employer makes for you.
After tax payments
Contribution cap: currently $180,000 pa or $540,000 over a three year period if you’re under age 65. The three year period starts when you contribute more than $180,000 in a financial year.
The government announced in the 2016-17 Federal Budget a new $500,000 lifetime contribution cap starting on 3 May 2016. It includes all after tax contributions made on or after 1 July 2007. However, this new contribution cap is not yet law and will need to be passed by Parliament.
An after tax contribution is money you put into your super from your take home pay after your tax is taken out or from other savings.
What happens if I add more than the cap?
Before tax contributions
If you go over the before tax contribution cap, you can either:
- withdraw up to 85% of the excess contributions and have the excess amount included in your assessable income and taxed at your marginal tax rate, along with an interest charge. You’ll receive a 15% tax offset for the contributions tax already paid by your super fund.
- keep the excess contribution in your super fund and have the excess amount included in your assessable income and taxed at your marginal tax rate, along with an interest charge. You’ll receive a 15% tax offset for the contributions tax already paid by your super fund. To help pay the extra tax, you can withdraw up to 85% of your excess before tax contributions from your super fund. The money kept in super will be added to your after tax contribution cap.
After tax contributions
If you go over the after tax contribution cap you can either:
- withdraw the excess amount and earnings and include the earnings as part of your income, or
- pay 49% tax on the excess amount.
Any excess before tax contributions that you don’t withdraw from your super fund will also count towards your after tax contribution cap.
For more information see our fact sheet How much can I add to my super account?
How much have you added to your super?
To check how much you've added to your super account, log in to your Member Account.