The caps apply to most contributions
Making additional contributions to your super can boost the amount you have in retirement. However, if you exceed the government contribution caps, there may be tax implications.
The caps apply to most contributions you make yourself, as well as any employer and spouse contributions, that have been made during the financial year.
Sometimes, the contribution caps described below don't apply. For example, if you sell a small business and use the proceeds to make a contribution, a different cap may be applied.
If you sell your main residence, you may be eligible to make a downsizer contribution, which also counts towards a different cap.
To ensure you don’t breach your contribution caps in a financial year, you need to understand that there are two main types of contributions:
This contribution type generally includes, but isn't limited to:
- Contributions from your take home pay or personal savings (for which you haven't claimed a tax deduction)
- Contributions made by your spouse on your behalf.
Non-concessional contributions aren't subject to tax when you contribute them to the fund.
This contribution type generally includes, but isn't limited to:
- Compulsory contributions made by your employer referred to as Super Guarantee (SG)
- Salary sacrifice payments made from your pre-tax income
- Personal contributions claimed as a tax deduction.
Concessional contributions are subject to 15% tax when made to the fund.
If you stay within the contribution limits, concessional contributions can be a tax-effective way of increasing your retirement savings.
However, if you’re a high income earner, your concessional contributions may be subject to an extra 15% Division 293 tax.
Please visit the Australian Tax Office (ATO) website for more information on Division 293 tax.
What are the current caps?
The 2023–2024 contribution caps are outlined in the following table.
$27,500 per year
In certain circumstances, you may be able contribute more than the annual cap limit if you have unused cap amounts from the previous financial years. For more details, please see 'Unused concessional cap carry forward' on the ATO website.
$110,000 per year
If your total super balance on 30 June 2023 was less than $1.9 million, you might be able to contribute more than $110,000.
If your total super balance on 30 June 2023 is $1.7 million or more, your non-concessional contributions cap is nil for 2023-24.
For more detailed information, included the caps applied to previous tax years, visit the Australian Tax Office website.
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Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) is the trustee of the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557 and issuer of FirstChoice range of super and pension products. Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) is the responsible entity and issuer of products made available under FirstChoice Investments and FirstChoice Wholesale Investments.
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