A concessional contribution is generally any contribution made to a superannuation fund that is included in the assessable income of the fund, and includes all contributions made by an employer, and personal contributions made by a member for which they intend to claim as a tax deduction.
Concessional contributions will be taxed in the fund at the rate of 15%. However, when a client exceeds the applicable concessional contribution caps (as below) an additional 31.5% tax will be payable on top of the 15% contributions tax.
Caps on concessional contributions
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CONTRIBUTION CAP
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2010
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2011
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Age less than 50
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$25,000
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$25,000
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Age 50 or more
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$50,000
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$50,000
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It is important to note, this contribution limit is a ‘per person’ limit and includes contributions made to all superannuation funds, from all sources (including salary sacrificed contributions).
A non-concessional contribution (formerly known as an undeducted contribution) is generally any contribution made to a superannuation fund that is not included in the assessable income of the fund, and includes personal contributions made by a member for which they are not intending to claim a tax deduction and spouse contributions.
Non-concessional contributions are not subject to the 15% contributions tax. However, contributions which exceed the non-concessional contributions caps (as below) will be subject to excess contributions tax at a rate of 46.5%.
Caps on non-concessional contributions
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AGE
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CONTRIBUTION CAP
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Less than 65 during financial year
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Annual limit – $150,000
Three year limit - $450,000
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Between 65 and 74 for full financial year
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Annual limit – $150,000
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Making a non-concessional contribution that is more than the annual cap is known as a ‘bring forward’. The maximum bring forward for the 2010 year is $450,000. When you contribute more than $150,000 in non-concessional contributions in one year, you automatically trigger the bring-forward rules for the following two years.
