Tax on Superannuation




  1. Tim

    Hi Chris, I had inadvertently filed a notice to my super fund to advise them I intend to claim my personal super contribution of $20,000 as a tax deduction. I subsequently realised that I would then exceed the $25,000 cap by that $20,000. I rang my super fund to tell them I want to revoke that notice, but they said it was too late, they had submitted it to the ATO. Am I in a worst off tax position?

    • Chris Strano

      Hi Tim,
      Exceeding the concessional contribution cap will result in the excess being taxed at your marginal tax rate. The intention of this is to negate the personal tax benefit received for the concessional contribution amount over and above the cap. A 15% tax offset will be received to offset the contributions tax paid on the excess amount.
      There may also be an Excess Concessional Contribution Charge, which is designed to reimburse the ATO for the fact that the applicable personal income tax on the excess is being collected later than normal.
      You can elect to withdraw up to 85% of the excess amount contributed (representing the contribution amount, less contributions tax of 15%).
      If you don’t elect to withdraw the excess, the excess amount will count towards your non-concessional contribution cap.
      Click here to read more under the heading ‘if you go over the concessional contributions cap’.
      To answer your question, the ATO does not seek to penalise people for exceeding contribution caps. They merely try to return the position to how it would have been had the cap not been exceeded. While this cannot be achieved perfectly, due to the excess concessional contributions charge, the intention is that you will not be in a worse-off tax position.
      To apply for a release of the excess amount, you will need to complete the excess concessional contributions election form.
      Related Posts:
      Excess Concessional Contributions Charge

  2. Gary Lynch

    Hi Chis

    I am 65 years of age and on jobseeker benefits and due to retire in the next 12 months. My spouce is a temperary australian resisident (waiting for Permanent residency)she recently opened a Cbus account but has yet made any payments into her account (Zero balance). How much in total can i pay into her account ? Is it $100,000 or $300,000.

    • Chris Strano

      Hi Gary,
      There are two types of contributions: concessional and non-concessional. Each type of contribution has it’s own contribution cap (limit), per person, per year. The general annual cap for concessional contributions is $25,000 and $100,000 for non-concessional. However, there are instances were you can contribute more than these general caps and there are instances where you cannot make any contributions at all. It depends on your situation and whether or not the Fund accepts contributions from temporary residents. You might also want to consider whether it is more beneficial to make the contributions into your account or your spouse’s account from a tax and accessibility perspective. Gary, feel free to make a complimentary 15-minute consultation using this calendar link if you would like to discuss your options.


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