The end of financial year is edging closer, but you still have time to make the most of your contributions caps.
What are the contributions caps?
After-tax (non-concessional) contributions are capped at $100,000 each financial year.
Non-concessional contributions include:
- personal contributions you haven’t claimed a tax deduction for
- spouse contributions
- any excess concessional contributions.
Before-tax (concessional) contributions are capped at $25,000 each financial year.
Concessional contributions are primarily made up of:
- employer contributions including super guarantee (SG) and other compulsory contributions
- salary sacrifice contributions
- personal contributions you’ve successfully claimed a tax deduction for.
Play contribution catch-up with the new carry-forward concessional contribution rule
Starting 1 July 2019, if your super balance is under $500,000, you may be able to go over the $25,000 contribution cap by using your unused cap amounts from 1 July 2018. This is called a ‘carry-forward’ contribution.
How does the carry-forward rule work?
Let’s look at this case study.
Kate is 46 and earns $100,000 each year.
In the 2018-19 financial year, Kate’s concessional contributions totalled $10,000. They were made up of $9,500 super guarantee and $500 salary sacrifice contributions. This means Kate fell $15,000 short of reaching her concessional contribution cap.
In the 2019-20 financial year, Kate is then able to make concessional contributions totalling $40,000. This amount is made up of her annual $25,000 concessional contributions cap and her unused amount of $15,000 from the previous financial year.
Things to note
- The carry-forward concessional contribution rule doesn’t apply to those with a balance more than $500,000 at the beginning of the current financial year.
- Unused concessional contributions work over a rolling five-year period and at the end of that period, any unused amounts expire.
- Subject to preservation and only accessible when you meet a condition of release.
How close are you to your cap?
To see how close you are to reaching your cap, simply log in to Tasplan Online, navigate to Contributions > Contribution caps.
Cut-off dates to make contributions in the 2019-20 financial year
If using BPAY, your payments should be lodged by close of business 25 June 2020 to ensure we receive your money in time.
- Direct debit
The final direct debit run for the 2019-20 financial year will be processed on 19 June 2020.
Cheques must be received by 2pm on 30 June 2020. Cheques can be delivered in person to the Tasplan offices in Hobart and Launceston, or by appointment only in Devonport.
Have more questions?
If you’d like more information, you can call us on 1800 005 166.