Limit: $25,000 per person.
This includes all sources of concessional contributions: super guarantee (compulsory employer contributions), salary sacrifice, personal contributions for which a deduction is claimed, etc.
Contributions are taxed at 15%. If the member has taxable income in excess of $250,000, contributions are taxed at 30%. Tax is paid by the super fund.
Limit: $100,000 per person per year.
These are after-tax contributions. Prior to age 65, a person can ‘bring forward’ two more years’ worth of contributions, such that they can contribute $300,000 in one year. They then cannot make further non-concessional contributions in the following two years. Between 65 and 74, a person cannot bring forward future contributions but they can contribute $100,000 per year.
Non-concessional contributions cannot be made by people with more than $1.6 million in super contributions.
Certain types of non-concessional contributions are exempt from these limits. These include proceeds from a settlement for personal injury, government co-contributions and proceeds from the sale of small business assets. Please ask for our advice if you believe you may qualify for an exemption from the annual limit.
When low income earners make non-concessional super contributions, the Government will make a co-contribution up to a limit of $500. The Government contributes a maximum of 50c for every $1 you contribute, so you need to contribute $1,000 to get the full co-contribution.
People who earn less than $36,813 receive the full 50c for every $1 they contribute. For every $1 earned above this threshold, the co-contribution is reduced. Once your income exceeds $51,813, you do not receive any co-contribution at all.
Making super contributions usually means paying less tax, because personal tax rates usually exceed 15%, which is the tax paid on concessional contributions. The personal tax rates for 2017/2018 are:
| Taxable income | Tax |
|---|---|
| 0 to $18,200 | Nil |
| $18,201 to $37,000 | 19c for each $1 over $18,200 |
| $37,001 to $87,000 | $3,572 plus 32.5c for each $1 over $37,000 |
| $87,001 to $180,000 | $19,822 plus 37c for each $1 over $87,000 |
| $180,001 and over | $54,232 plus 45c for each $1 over $180,000 |
The preservation age is the minimum age that you must reach before you can access your super. Your preservation age depends on your year of birth. The range of preservation ages is:
| Date of Birth | Preservation Age |
|---|---|
| Before 1 July 1960 | 55 |
| 1 July 1960 – 30 June 1961 | 56 |
| 1 July 1961 – 30 June 1962 | 57 |
| 1 July 1962 – 30 June 1963 | 58 |
| 1 July 1963 – 30 June 1964 | 59 |
| From 1 July 1964 | 60 |
For people who have reached preservation age, super funds do not pay tax on earnings derived from assets used to finance a pension. If you are drawing a pension from your own SMSF, then you must withdraw at least the following amounts each year:
| Age | Minimum withdrawal |
|---|---|
| Under 65 | 4% |
| 65 – 74 | 5% |
| 75 – 79 | 6% |
| 80 – 84 | 7% |
| 85 – 89 | 9% |
| 90 – 94 | 11% |
| 95+ | 14% |
