Super Contributions Caps for 2015 / 2016 Financial Year
30th June is closer than you think! It’s time to get focused on maximising your super to help with retirement goals.
Topping up your super is a tax-effective strategy but it is complex with so many rules depending on your personal situation like your age, whether you work or not and how much you can contribute to super without being penalised by additional taxes.
To make things simple and easier to understand, here is an explanation of what superannuation contributions are, and the different ‘caps’ that apply, that is, how much you can tuck away into your super tax-effectively.
What are Superannuation Contributions Caps?
There are limits to the amount of pre-tax (concessional) and post-tax (non-concessional) contributions you can make to your super each financial year.
To avoid additional tax on super contributions, it is important to be aware of the caps and monitor the amount of money you contribute to all of your super funds each financial year.
|Pre-tax contributions (Concessional)|
|Under 49 on 30 June 2015||$30,000 p.a.|
|49 years or over on 30 June 2015||$35,000 p.a.|
|Post-tax contributions (Non-Concessional)|
|Under age 65 on 1 July 2015||$180,000 p.a. or $540,000 over a 3 year period using the ‘bring forward rule’|
|Age 65 or over on 1 July 2015||$180,000 p.a.|
Pre-tax (concessional) Contribution Cap
A concessional contribution is a contribution that is made to your super fund using ‘pre-tax’ money, that is, before-tax is applied to your income. When the pre- tax money hits your super fund a concessional tax rate of 15% is applied. These contributions typically include employer contributions and salary sacrifice contributions.
Under 50s Concessional Contributions Cap
- For the 2015/2016 year: If you’re aged 48 years or younger on the 30 June 2015, you can contribute up to $30,000 a year in concessional contributions for the 2015/2016 year.
Over 50s Concessional Contributions Cap
- For the 2015/2016 year: If you’re aged 49 years or older on the 30 June 2015, then you can contribute up to $35,000 a year in concessional contributions for the 2014/2015 year. You can continue to contribute $35,000 a year after you turn 65 if you meet the “work test”.
Post-tax (non-concessional) Contribution Cap
Non-concessional contributions are generally voluntary contributions using ‘after-tax money’. That is, tax has already been applied to your income, and so they are not taxed again when they are placed into super.
The non-concessional contributions cap remains at $180,000 for the 2015/2016 year for all ages. Alternatively, you could take advantage of the bring-forward rule during the 2015/2016 year and make up to $540,000 in non-concessional contributions in one year, or over 3 years in various combinations.
Under age 65 on 1 July
If you are under age 65 on 1 July of the financial year, you can bring forward the next two years of post-tax contributions and contribute up to $540,000 over a three year period provided you have not already invoked this rule in the previous three year period. If a person has invoked the “bring-forward rule” in a particular year, their non concessional cap will remain at three times the non concessional cap in the first year.
Aged 65 or over on 1 July
If you are aged 65 or over on 1 July of the financial year, you can make a non-concessional contribution of $180,000 if you still meet the “work test”. However you cannot access the bring-forward provisions.
You should be aware there are other conditions that you must satisfy, when making any super contributions. It is highly recommended you consult with an adviser to understand all the facts before making any top-ups to your super fund.
This information has been prepared by Primestock Securities Limited ABN 67 089 676 068, AFSL 239180 (“Prime”). Prime accepts no obligation to correct or update the information or opinions in it. This information does not take into account your objectives, financial situation or needs. Before acting on this information, you should consider whether it is appropriate to your situation. It is recommended that you obtain financial, legal and taxation advice before making any financial investment decision. Prime is bound by the Australian Privacy Principles for the handling of personal information.
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