Making additional contributions to your super is a great way to build your retirement savings, but there are limits set by the Australian Government on how much you can contribute without paying extra tax.

There are 2 types of super contributions:

Concessional contributions These are generally paid into super from money you have not yet paid tax on (for example, employer contributions and salary sacrifice).
Non-concessional contributions These are generally paid into super from money you have already paid tax on (for example, post-tax contributions).

 

There is an annual maximum limit to both the amount of concessional and non-concessional contributions you can receive to your super.

Concessional Contributions

 

Concessional contributions are so-called because they are taxed at a lower or ‘concessional’ rate than many other forms of investment. These contributions are taxed at the concessional rate of 15% when paid into your super fund, and include:

  • For Division 5 (accumulation) members, actual employer contributions (minimum 10% of salary), plus some scheme admin fees that your employer pays on your behalf.
  • Your pre-tax member contributions (for defined benefit members in Division 2 or 4)
  • Your pre-tax additional voluntary contributions (AVCs), such as salary sacrifice contributions*
  • For defined benefit members in Division 2, 3 or 4, a notional employer contribution
  • Other pre-tax payments (eg. bonus payments or extra contributions)
  • Post-tax contributions for which you have claimed a tax deduction

(* Not for Division 3 members. Your member contributions are built into the notional employer contribution rate.)

The table below shows which types of payments are included as concessional contributions for each Division of ElectricSuper membership:

Division Pre-tax member conts Pre-tax AVCs Employer Conts Admin fees paid by employer Other pre-tax conts Personal conts (tax deduction)
Division 2 Notional 🗙
Division 3 🗙 Notional 🗙
Division 4 Notional 🗙
Division 5 Actual
What is a notional employer contribution?

 

For defined benefit members (in Division 2, 3 or 4), the actual contributions paid by your employer into ElectricSuper to fund all membes’ benefits is set by the Scheme Actuary at least once every 3 years. It is an amount that covers all member benefits.

The ATO provide a formula to calculate the notional amount that belongs to each member from the actual amount employers contribution for all members. We use this for our ATO reporting. The formula uses the member’s own contribution rate and salary. The salary at 1 July each year is always used for this.

The notional employer contribution rates are shown below:

Your contribution rate (excluding voluntary conts) as a % of salary
0% 1.5% 3% 4.5% 6% 7.5% 9%
You are a member of…. Your notional employer contribution rate (% of 1 July salary)
Division 2 8.4% 8.4% 8.4% 9.6% 10.8% 10.8% 10.8%
Division 3 8.4% 10.8% 12% 13.2% 15.6% 16.8% 19.2%
Division 4 8.4% 8.4% 8.4% 8.4% 8.4% 8.4% 8.4%

(* or Div 3 individual standard rate)

Note

  • Your payslip might show different employer contributions which instead relate to the minimum that your employer must contribute to your super under government law (and in defined benefit funds, employers generally fund benefits at a much higher rate than the minimum required.)
  • If you are over age 60 and have reached your maximum employer benefit, the notional employer contribution rate may be lower.
  • ‘Carry forward’ concessional contributions
  • How do you find out how you’re going against the concessional cap for this year?
  • If you are likely to go over the concessional cap, what options do you have?
  • What happens if you do go over the concessional cap?
  • Division 293 tax debt for high income earners

Non-concessional Contributions

 

Non-concessional contributions are contributions to your super which are not given lower, or ‘concessional’ tax treatment.

They include any contributions that you pay into your super from post-tax income, plus

  • any excess concessional contributions
  • all pre-tax contributions

Non-concessional contributions are not taxed when they are received by ElectricSuper, as generally you have already paid income tax on this money.

 

What is your non-concessional contributions cap?

 

The current year’s non-concessional cap can be found on the ATO website. There are exceptions to the cap, which is reviewed and can be adjusted annually.

 

‘Bring-forward’ rule for under 67s

 

This rule allows those under 67 years old to make up to 3 years’ worth of non-concessional contributions to their super in a single income year. This means you can contribute up to 3 times the current annual non-concessional contributions cap into your super in one financial year without having to pay extra tax. Essentially, those who use the rule are ‘bringing forward’ their next 2 years of caps into the current year.

Whether you can use the bring-forward rule depends on 2 factors:

  1. your total super balance, and
  2. your age.

The bring-forward rule is only available to those whose super balance is under a certain limit. You can find the super balance limit on the ATO website.

Secondly, you must be under 67 years old for at least one day during the triggering financial year (the first year you use the bring-forward rule) to be eligible.

 

Work test for over 67s

 

Keep in mind that as soon as you turn 67 years old, you will need to satisfy the work test (that is, you must work at least 40 hours over 30 consecutive days) before you can make any super contributions

However, if your total super balance is less than 3 times the current non-concessional cap amount, you can contribution for an additional 12-monthy period from the end of the financial year you last met the work test. Once you reach age 75, you can’t add to your super yourself, although you may still receive employer contributions and Award payments if you’re eligible.

  • If you are likely to go over the non-concessional cap, what options do you have?
  • What happens if you do go over the non-concessional cap?

If you have any questions

For general questions, or website access, please call our Helpline on 1300 307 844 or