From 1 July 2021, the caps for concessional (pre-tax) and non-concessional (post-tax) contributions will be indexed. Any amount contributed in excess of these caps may be subject to additional tax.
In 2020-21 the concessional contribution cap was $25,000, this will be increasing to $27,500 in the 2021-22 financial year.
In 2020-21 the non-concessional contribution cap was $100,000, this will be increasing to $110.000 in the 2021-22 financial year.
- Concessional contributions include salary sacrifice contributions, voluntary contributions for which a tax deduction is claimed and employer contributions (which includes any insurance premiums and administration fees an employer pays on behalf of an employee).
- Non-concessional contributions include personal contributions for which employees do not claim an income tax deduction such as member voluntary (after-tax) contributions and spouse contributions.
- Bring-forward limit applies to non-concessional contributions and means those under 65 at any point during the financial year may be able to bring forward two years’ of after-tax super payments, allowing them to contribute up to three times the cap at once or at any time during the three financial years.
Transfer balance cap
The ATO has also confirmed that from 1 July 2021, the general transfer balance cap (currently $1.6 million) will be indexed to $1.7 million. Following indexation, no single transfer balance cap will apply to all individuals. Individuals will have a personal transfer balance cap between $1.6 million and $1.7 million, depending on their circumstances. Indexation of the general transfer balance cap will change other caps and limits.
Note that there is an interaction between the non-concessional contribution cap and the general transfer balance cap and the ability to bring-forward contributions. We recommend members seek financial advice about their own personal circumstances.
Find out more at the ATO’s website
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