What are the superannuation limits
3 min read
Key takeaways
- Pre-tax contributions (minimise your tax)
How Much Can You Contribute to Superannuation?
Superannuation is a powerful tool for building wealth for retirement, but there are limits on how much you can contribute before extra taxes apply. Here’s what you need to know about the different contribution caps.
Concessional Contributions (Before-Tax Contributions)
These contributions are taxed at 15% within your super fund (instead of your marginal tax rate, which could be much higher).
- Annual Cap: $30,000 per year (2024-25)
- Types of concessional contributions:
- Employer Super Guarantee (SG) contributions (currently 11.5% of your salary)
- Salary Sacrifice contributions (extra pre-tax contributions via your employer)
- Personal Deductible Contributions (if you contribute from your own money and claim a tax deduction)
Carry-Forward Rule: If your total super balance is under $500,000, you can carry forward unused concessional cap amounts from the past five financial years to contribute more in later years.
Non-Concessional Contributions (After-Tax Contributions)
These contributions come from your after-tax income, so they are not taxed again within the fund.
- Annual Cap: $120,000 per year (2024-25)
- Bring-Forward Rule: If you’re under 75, you can bring forward up to three years’ worth ($360,000) of contributions at once, as long as your total super balance is below the limit.
Total Super Balance Limit: If your total super balance is over $1.9 million, you cannot make non-concessional contributions.
Other Contribution Strategies
Government Co-Contribution: If you earn under $58,445, the government may contribute up to $500 when you make an after-tax contribution.
Spouse Contributions: You can contribute to your spouse’s super and get a tax offset of up to $540 if they earn under $37,000.
Downsizer Contribution: If you’re 55+ and sell your home, you can contribute up to $300,000 to super without affecting your contribution caps.
What Happens If You Exceed Contribution Caps?
If you contribute more than the allowed limits:
- Concessional Contributions – The excess amount is taxed at your marginal tax rate (minus a 15% credit for the tax already paid in super).
- Non-Concessional Contributions – You may need to withdraw the excess or pay 47% tax on the amount.
How to Maximise Your Super Strategy
If you want to learn more on how to increase your superannuation and minimise tax, feel free to contact one of our financial advisors.
- Phone: (03) 9044 1950
- Email: admin@pointbplanning.com.au
- Address: 12 Taylor Street, Yarraville, Victoria
