There are limits on how much money you can contribute to your super each financial year.
These are called contributions caps – going over the caps may mean you have to pay additional tax. There are two main types of contributions caps relevant to most people:
Concessional (before-tax) contributions cap
| July 2021 – June 2024 |
$27,500 |
| July 2017 - June 2021 |
$25,000 |
The concessional contributions cap for the 2023-24 financial year is $27,500. In other words, you can make up to $27,500 in before-tax contributions in one financial year before facing extra taxes. Keep in mind this includes any Superannuation Guarantee (SG) contributions made by your employer, as well as any salary sacrifice amounts. For more information about what are considered concessional contributions, visit the ATO website.
Want to manage your contribution caps?
You can do it online on the ATO portal.
Carrying forward your unused concessional contributions caps
Unused concessional contributions cap amounts can be carried forward and allow you to make additional concessional contributions above the yearly cap, if eligible. The idea is that you can increase your concessional contributions in a particular year by taking advantage of any unused cap amounts from previous financial years. You could be eligible if:
- your total super balance is less than $500,000 at the end of the previous financial year
- you have unused concessional cap amounts available from up to the previous five financial years, starting from the 2018-19 year.
Learn more on the ATO website.
Case study: Macy wants to carry forward her unused caps
On 30 June 2023, Macy had a total super balance of $260,000. She hasn’t used up her concessional contributions caps in the past five financial years, so she’s eligible to carry forward her unused caps.
To work out how much she can carry forward in 2023-24, she adds up her total unused caps from the past five years (the difference between her contributions and the total cap for that year):
- $7,000 in 2018-19
- $13,000 in 2019-20 and 2020-21
- $0 in 2021-22
- $12,500 in 2022-23
Macy’s total available carry-forward amount for 2023-24: $45,500
For 2023-24, the concessional contributions cap is $27,500. However, Macy is able to use her unused cap amounts from the past five financial years on top of the 2023-24 concessional contributions cap.
Macy’s maximum concessional contribution for 2023-24: $45,500 + $27,500 = $73,000
This means she can contribute up to $73,000 as a concessional contribution for the 2023-24 financial year without exceeding the yearly cap.
Click to expand calculations
| 2018-19 |
$25,000 |
$18,000 |
$7,000 |
| 2019-20 |
$25,000 |
$12,000 |
$13,000 |
| 2020-21 |
$25,000 |
$12,000 |
$13,000 |
| 2021-22 |
$27,500 |
$27,500 |
$0 |
| 2022-23 |
$27,500 |
$15,000 |
$12,500 |
| |
|
Total unused concessional contributions: |
$45,500 |
| |
|
Max concessional contribution for 2023-24: |
$73,000 |
Is making voluntary contributions worth it?
See how making voluntary contributions could affect your future balance.
What happens if you exceed your concessional contributions cap?
If you exceed your concessional contributions cap, you’ll pay additional tax. The ATO will tell you your options if you do go over the cap.
Concessional contributions are generally taxed at 15%. You may have a higher tax rate if your combined income and concessional super contributions are more than $250,000 in a financial year.
Any contributions over the cap gets taxed at your marginal tax rate, minus the 15% you've already paid. The excess amount is then considered a non-concessional (after-tax) contribution and will count towards your non-concessional contributions cap (more on this below).
You can choose to take this excess amount out. Doing so will mean it won't count towards your non-concessional contributions cap.
For more information on the concessional contributions cap, visit the ATO website.
Non-concessional (after-tax) contributions cap
The non-concessional (after-tax) contributions cap is $110,000 for 2023-24. But not everyone can make these contributions – you won’t be able to make any after-tax contributions without paying additional tax if your total super balance is over $1.9 million on 30 June 2023.
Non-concessional contributions include personal contributions you make from your after-tax pay and spouse contributions. If you have more than one super fund, all non-concessional contributions made to all your funds are added together and counted towards the cap.
Thinking of making an after-tax contribution?
If you’re a Rest member, you can manage these on the go in the Rest App.
Bringing forward your non-concessional contributions caps
The bring-forward rule lets you make after-tax contributions above the cap without having to pay additional tax, if you’re eligible. The idea is that you’d use up to three years' worth of caps at once. So, instead of spreading out your extra contributions over multiple years, you can add them all in one go.
Like with most super-related policies, there are rules around eligibility and how much you can bring forward. To be eligible, you must:
- be under the age of 75 at any time in the financial year*
- have a total super balance of less than $1.9 million.
The contribution cap amount you can bring forward depends on how much super you have at the end of the previous financial year. To take maximum advantage of the bring-forward rule and access three years of caps, your total super balance must be less than $1.68 million.
*includes up to 28 days after the end of the month in which you turn 75.
Learn more about the ‘bring forward arrangement’ on the ATO website.
What happens if you exceed your non-concessional contributions cap?
If your non-concessional contributions go over the cap, you’ll get a determination letter from the ATO. According to the ATO, if you have exceeded your cap, you should wait until you receive the determination letter and have selected your option for how the excess will be treated before you apply to your super fund to take out the excess amount.
If you receive a determination letter from the ATO, you have 60 days to tell them what you want to do. You can do this either:
There are generally two options you can take:
Option 1: Withdraw the excess amount
You can take out:
• the excess amount, plus
• 85% of the associated earnings.
You’ll pay tax on the associated earnings at your marginal tax rate minus a 15% tax offset.
Option 2: Leave it in your super account and pay the tax
You can choose to leave the excess amount in your super fund. If you do this, you’ll pay the excess non-concessional contributions tax at the highest marginal tax rate plus Medicare Levy, which is 47% in the 2023-24 financial year.
Once you’ve told the ATO which option you’re taking, you won’t be able to change it. If you don’t make a choice within the 60-day period, the ATO will apply option 1. If you’re with a defined benefits fund, they’ll apply option 2.
Contributions caps can be confusing. If you’re a Rest member, speak with a Rest Adviser. For simple advice, there is usually no extra charge to you* – it’s part of being a member of Rest.
*Rest Advice is provided by Rest staff (Rest Advisers) as Authorised Representatives of Link Advice Pty Ltd ABN 36 105 811 836, AFSL 258145. Rest Advisers are paid a salary and do not pay or receive commissions or fees for advice provided to you. Rest Advice may be accessed by members without incurring additional fees for simple advice on your super account. If you need more complex advice from a Rest Adviser you’ll be charged a fee which will vary depending on the complexity of the advice and will be agreed with you before advice is given. You can obtain a full copy of the Rest Advice Financial Services Guide by calling us on 1300 300 778.
