From the 1st July 2017, the pre-tax (i.e. the concessional or deductible) contribution limit is $25,000 per financial year, reduced from $30-$35,000 in prior financial years.
If you exceed this limit, you will pay an additional tax called excess concessional contributions tax. This is at the highest marginal tax rate.
Pre-tax (i.e. concessional/deductible) contributions include:
- Employer superannuation guarantee contributions (SGC). The mandatory amount is usually 9.5% for employers or for those employed by their own company, but may be higher. For example, up to 12.75% for Queensland Health employees
- Compulsory employee contributions. For example, the 2% to 5% ‘standard voluntary’ contributions Queensland Health employees must make to super
- Salary sacrificed contributions i.e. additional voluntary contributions you choose to make as an employee
- Deductible contributions i.e. additional voluntary contributions you choose to make when you are self-employed to boost your super balance and/or pay the premiums for insurance within super
Generally its best to check with your accountant and financial adviser towards the end of the financial year in April-May, whether to make any additional voluntary contributions to super.
If you are currently making additional voluntary super contributions and have not spoken to us since the 1st July 2017 changes, best double-check this with us as soon as possible.