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 two types of super contributions – concessional and non-concessional, and there are different limits which apply to each.

Concessional Contributions

 

Concessional contributions generally include any contributions that you pay into your super on a pre-tax (salary-sacrifice) basis, plus any support towards your super from your employer. These contributions are taxed at the concessional rate of 15% when paid into the fund, and include:

  • Your pre-tax member contributions*
  • Your pre-tax additional voluntary contributions (AVC’s)
  • For Division 2, 3 and 4, a notional employer contribution
  • For Division 5, actual employer contributions (minimum 9.5% of salary) plus some Scheme admin fees that your employer pays on your behalf
  • 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 – these 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 AVC’s 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 the notional employer contribution?

 

For defined benefit members (in Division 2, 3 and 4), the actual contributions paid by your employer into ElectricSuper to fund all members benefits is set by the Scheme Actuary at least every 3 years. So that we can meet our ATO reporting requirements each year, the ATO gives us a formula to estimate the notional employer contribution for each member, using the member’s own contribution rate and salary. (The salary as at 1 July each year is always used, it does not consider any salary changes during the year.)

 

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 reached your maximum employer benefit, the notional employer contribution rate may be lower.

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)

  • What is your concessional contributions cap?
  • ‘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 include any contributions that you pay into your super from post-tax income, plus

  • any excess concessional contributions
  • any post-tax contributions for which you claim a tax deduction

Non-concessional contributions are not taxed in the fund, as you have already paid income tax on this money.

 

What is your non-concessional contributions cap?

 

From 1 July 2017, the general non-concessional cap is $100,000 per year. The exceptions are:

  • The cap may increase up to $300,000 in any year if you are eligible under the ‘bring-forward’ rule (see below); or
  • If your Total Superannuation Balance is $1.6m or more, your non-concessional cap is zero (so any non-concessional contributions will be in excess of the cap)‘

 

Bring-forward’ rule for under 65’s

 

This rule allows those under 65 years old to make up to three years’ worth of non-concessional contributions to their super in a single income year. This means you can contribute up to $300,000 – or three times the current $100,000 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 two years of caps into the current year.

Whether you can use the bring-forward rule depends on two factors: your total super balance and your age. From 1 July 2017 the bring-forward rule is only available to those with under $1.5 million in super, and you can only make full use of it if your balance is $1.4 million or less (see table below). Secondly, you must be under 65 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 65’s

 

Keep in mind that as soon as you turn 65 years old, you will need to satisfy the work test (work at least 40 hours over 30 consecutive days) before you can make any super contributions

However, if your total super balance is under $300,000 you can contribute for an additional 12-month 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.

Total superannuation balance on 30 June of the previous financial year Non-concessional contributions cap for the first year Bring-forward period
Less than $1.4m $300,000 Over 3 years
$1.4m to less than $1.5m $200,000 Over 2 years
$1.5m to less than $1.6m $100,000 No bring-forward period, general non-concessional contributions cap applies
$1.6m or more Nil N/A
  • 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