WA Super News

New contribution caps for the 2014/15 financial year

27/03/2014

New contribution caps for the 2014/15 financial year

There are many important tax benefits associated with investing in super. But to make the most of these benefits you need to understand the different types of super contributions, and be aware of the limits (referred to as ‘caps’) that exist on how much you can contribute to super tax-effectively each financial year.

The government has imposed limits on the amount you can contribute to your superannuation account. These are known as concessional and non-concessional contributions caps.

Consessional contributions

Concessional (before-tax) contributions are generally made to a super fund by your employer, or if you’re self-employed, those made by you for which you claim a tax deduction. Examples include Superannuation Guarantee (SG) contributions, salary sacrifice amounts, and any amount allowed as a personal deduction in your income tax return.

Following the resumption of normal indexing of the concessional contributions cap, the cap will increase to $30,000 for the 2014/15 year. Higher caps of $35,000 apply to older Australians aged 49 years or over on 30 June 2014.

If you exceed your concessional contributions cap the excess contributions are included in your taxable income. You will receive a non-refundable tax offset equal to the 15% tax paid by your fund on this amount.

If you haven’t reached your caps, there may be an opportunity for you to boost your super and reduce your taxable income. 

Financial advice

Members of WA Super have access to top-quality, full service financial planning on a fee-for-service basis. They can provide high quality financial advice and help you understand these caps and give you the opportunity to boost your super and reduce your taxable income.

Contact us and book your appointment now, initial consultation is free.

Non-concessional contributions

Non-concessional (after-tax) contributions are personal super contributions which you or your spouse makes for you with after-tax income.

The non-concessional contribution cap for 2014/2015 is $180,000 per year. If you are under age 65 you can contribute up to $540,000 in one year by bringing forward two years of contributions. You then cannot make another non-concessional contribution for two years.

If you exceed your non-concessional contributions cap a tax of 46.5% applies to the excess.

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