Superannuation seems to be constantly changing so an update is always valuable and getting Super contributions wrong can be very costly in penalties, fines and time.
The key contribution thresholds and tax rates are as follows:
| Item | Rate/Threshold |
| Concessional Contributions Cap | $25,000 |
| Tax rate on Concessional Contributions up to cap | 15% |
| Non-Concessional Contributions Cap | $100,000 |
| Tax rate on Non-Concessional Contributions up to cap | Nil |
| Division 293 tax threshold | $250,000 |
| Division 293 tax rate | 15% |
Concessional Contributions
From 1 July 2017, the maximum contribution that can be contributed to superannuation under the Concessional Contributions Cap is $25,000 for every one of all ages now.
It should be noted that those with low superannuation balances (i.e. less than $500,000) are able to carry forward any unused cap for five years; therefore potentially you could contribute $125,000 in one year and nil in the surrounding four years.
Concessional contributions are deductible to the employer and taxed concessionally (15%) by the super fund.
Non-Concessional Contributions
The 2019 financial year cap remains $100,000 for individuals with superannuation balances of less than $1.6 million at the end of the previous financial year (30/06/2018).
Bring Forward non-concessional contributions are available, though are now dependent on age and the superannuation balance.
Non-Concessional Contributions are those contributions made from after tax money for which no tax deduction is claimed.
Division 293
The threshold was previously $300,000 and is now $250,000; tax is levied at 15% of the concessional contributions made up to the contribution amount.
Exceeding the caps can lead to penalties being applied by the ATO, which ultimately effects your superannuation balance.
To discuss how further please do not hesitate to contact David Jepsen 02 8207 6721 or [email protected].