Super

There is a limit to the amount of money you can voluntarily contribute into your super fund on a concessional basis. Superannuation contribution limits operate to limit the tax benefits available each year.

Making contributions over the limits results in additional tax payable, and excess concessional contributions are counted towards the non-concessional cap. 

Concessional contributions are essentially those contributions which are tax deductible, and include employer contributions and personal contributions. 

The current concessional contributions cap, regardless of age is $27,500 per annum for the 2024 year, increasing to $30,000 for the 2025 year. However, if you have a total superannuation balance of less than $500,000 at the end of the year prior to making the contribution, and you have not used all of your cap in previous years, you may be able to contribute more by utilising your unused cap amounts from the 2019 year onwards. Unused cap amounts can be carried forward for up to 5 years.

From 1 July 2022 if you are under 75 years of age, you will no longer need to meet the work test to make or receive non-concessional super contributions and salary sacrifice contributions. If you are aged 67-74 years, you will however be required to meet the work test in order to claim a personal superannuation contribution deduction.

To meet the work test, you must be gainfully employed for at least 40 hours during a consecutive 30-day period in the financial year in which the contributions are made.

Non-concessional contributions are those made from after-tax income. There is no contributions tax applied when they are contributed to the super fund. Once in the fund, the normal fund tax rates apply to earnings

The non-concessional contributions cap is $110,000 for the 2024 year, increasing to $120,000 for the 2025 year. The bring-forward rules allow you to make up to three years' worth of non-concessional contributions in a single year.

Until 30 June 2022, you needed to be under age 67 during a financial year to take advantage of the bring-forward rule. From 1 July 2022, the age limit increased to age 75, allowing people in their early 70s to start a bring-forward arrangement.

Amounts paid into superannuation by your employer to meet the Superannuation Guarantee obligations and amounts paid under a salary sacrifice arrangement are called concessional contributions.

Salary sacrificing into super involves asking your employer to redirect a portion of your pre-tax pay into your super fund. These contributions are taxed at a rate of 15% in the super fund. For most, this is a lower rate of tax than their marginal tax rate.

The concessional contributions cap per annum, per individual, is $27,500 for the 2024 year (increasing to $30,000 for the 2025 year). If the total of your employer superannuation contributions, any personal contributions you have made for which you will be claiming a tax deduction and salary sacrifice contributions go over this cap, you may have to pay extra tax. However, if you have a total superannuation balance of less than $500,000 at the end of the year prior to making the contribution, and you have not used all of your cap in previous years, you may be able to contribute more by utilising your unused cap amounts from the 2019 year onwards. Unused cap amounts can be carried forward for up to 5 years.

Check your employment agreement or speak with your employer before arranging salary sacrifice into super. 

People who have reached 60 do not pay tax on superannuation income streams (pensions or annuities) that are paid from a taxed fund. A taxed fund is one where contributions tax was paid on the contributions made by your employer into your super fund on your behalf.

Contributions tax would also have been paid for contributions made under a salary sacrifice arrangement. Most funds are taxed funds. However, for taxpayers who belonged to an untaxed super fund, they will still have to pay tax on their superannuation income stream, irrespective of their age.

Taxpayers who are over 60 years of age (for the full financial year) and receiving a superannuation income stream from a taxed fund do not receive a PAYG income statement.

Even if your employer is required to contribute to your super, you are now also eligible to contribute and claim a tax deduction.

Contributions that you claim as a tax deduction count towards the concessional contributions cap ($27,500 for the 2024 year, increasing to $30,000 for the 2025 year), along with any contributions your employer pays and any salary sacrifice contributions you make to your super. If this cap is breached, you may have to pay excess tax. However, from the 2019 year, if you have not used your concessional contributions cap for the year, the excess may be carried forward and used in a future year (within 5 years).

If you claim a tax deduction for a contribution you have made, you are not eligible for the super co-contribution for the amount you claim.

You must make a valid ‘notice of intent to claim’ in the approved form (https://www.ato.gov.au/forms-and-instructions/superannuation-personal-contributions-notice-of-intent-to-claim-or-vary-a-deduction) to your super fund before you lodge your tax return or by the following June 30, whatever is earliest.

You must receive an acknowledgement from your super fund that a valid notice of intent has been received, BEFORE you claim the tax deduction.

If you make a personal contribution to super, you don’t have to claim a tax deduction. It will be treated as a non-concessional contribution and won’t be taxed in the fund. You may be eligible for a co-contribution for amounts not claimed as a tax deduction. 

If you do not tell your superannuation fund what your TFN is then the fund will be required to pay additional tax on any contributions made by your employer (including salary sacrifice amounts).

Without having your TFN recorded, your fund will not be able to accept any personal contributions that you make and the government co-contribution that you may be entitled to cannot be paid into your account.

At H&R Block nothing is too complicated. We can assist you with any number of tax questions. Find an office near you and book an appointment online or call 13 23 25.