With the new financial year commenced, we would like to provide an update on the contribution caps for the 2021 financial year.
With the new financial year commenced, we would like to provide an update on the contribution caps for the 2021 financial year.
Concessional contribution cap
The concessional contributions cap for the 2021 financial year remains at $25,000 for everyone, no matter what your age is.
Concessional contributions include employer contributions (including salary sacrifice) and personal contributions where a tax deduction will be claimed.
If you have a total super balance of less than $500,000 and do not use the full concessional contributions cap of $25,000, you can carry forward the unused amount and use it in subsequent financial years (up to a maximum of 5 years).
The non-concessional contribution cap
The non-concessional (after tax) contributions cap for the 2021 financial year remains at $100,000 unless you are eligible to make ‘bring forward’ contributions.
Non-concessional contributions are personal contributions made to a fund in which no tax deduction is claimed.
Currently, members under 65 years of age have the option of bringing forward contributions of up to $300,000 over a three-year period depending on their total super balance (members with a total super balance greater than $1.4 million can contribute up to a reduced cap over a three-year period). The Government recently proposed that the bring forward age to be increased to 67 years of age, however, the Bill to implement the change has not yet passed Parliament so members will need to wait until the Bill is passed before being able to access the extended bring forward measures.
Anyone making large superannuation contributions should exercise extreme care to avoid excess contributions. Making sure you do not exceed the contribution caps will save you both money and time of dealing with excess contributions.
