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Superannuation Contributions for 2018/2019

Superannuation Contributions for 2018/2019

Superannuation Contributions for 2018/2019

The contributions that a member can make into a superannuation fund will depend on whether those contributions are classified as “concessional” or ”non-concessional contributions”.

Concessional contributions refer to contributions made with before tax dollars while non-concessional contributions refer to contributions made with after tax dollars. For example. Employer contributions including salary- sacrificed contributions and personal contributions for which a tax deduction will be claimed are concessional contributions while non-concessional contributions are made with after tax dollars for which no income tax deduction can be claimed.

Both concessional and non-concessional contributions are subject to a cap, that is, you cannot contribute over the cap limits otherwise you will be subject to a tax penalty.

For the 2018/2019 financial year, the maximum amount of concessional and non-concessional contributions that can be made are as follows:

Concessional cap                                             $25,000 (regardless of age)

Non-concessional cap                                    $100,000

The non-concessional cap also allows you, where you are under 65 years old, to bring forward three years of contributions ($300,000) in any one year.

However, it should be noted that non-concessional contributions can only be made where your total superannuation balance is less than $1.6 million across all super funds of which you are a member.

Further, from 1 July 2018, where your total superannuation balance is less than $500,000 (on 30 June of the previous financial year), you may have the ability to contribute above the concessional cap allowing you to contribute up to available limits from prior years which were not previously utilised. This concession will commence in the 2019/2020 year and will be available for a period of 5 years.

 

 

 

 

 

Contributed by Minakshi Rohit.

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