Contributions that you make into your super fund before tax are called concessional contributions. Normally these contributions are taxed at 15% in your super fund. From 1 July 2021, the contribution cap is $27500. However, your cap may increase if you did not make any Contributions in the previous years (Carry-forward unused concessional contributions) According to Division 293 if the income and contributions exceed $250000 you will have to pay additional tax.
Types of concessional contributions
- Employer contributions
- Salary sacrifices arrangements made into your super fund
- Personal contributions that you will be allowed to make as an income tax deduction
- Other payments by your employer before tax to your super fund
Non- Concessional contributions
These are contributions that come to your super fund after tax and will not be taxed in your super fund. From 1 July 2021, the cap for non-concessional contributions is $110000. However, if you contribute more you will have to pay additional tax. In some cases, the cap might be higher due to bring-forward arrangements. Also, if the total super balance on the fund is greater or equivalent to the transfer balance cap you can’t make any non-concessional contributions into the fund. If you have more than one fund, the total non-concessional contributions made to all your funds will count to your non-concessional contributions cap.
Types of non-concessional contributions
- Contributions you or your employer make from after-tax income
- Contributions your spouse make
- Excess contributions which you have not claimed as a deduction
- Life insurance fees and other fees (Only in some cases)