Since its introduction, the upper limit on what you can pay in – known as the “concessional cap” – has ranged between $50,000 for those aged under 50 and $100,000 for those aged over 50, down to $25,000 for all. On 1 July 2014, the concessional caps for super contributions changed again.
What Are The New Superannuation Concessional Gaps?
Currently, the superannuation concessional caps that apply are as follows:
|Income year||Cap for those aged 59 years or over on 30 June 2013||Cap for those aged 49 years or over on 30 June 2014||Cap for those aged under 50|
Why would you put extra before-tax money into super contributions?
In short, because for many people it is a tax-effective way to save!
When you make a concessional contribution into superannuation, it comes out of your before-tax money. Sometimes it is called a “salary sacrifice”. If you earn more than $37,000, your income tax rate is 32.5% plus Medicare levy. The contributions tax that applies to concessional contributions, on the other hand, is just 15%. Here’s an example:
|Normal Taxation||Contributing to Super|
|Income tax + Medicare levy||$345||0|
|Amount available to invest||$655||$850|
A word of warning: it’s important to note that concessional super contributions include your employer’s 9.5% super guarantee contribution, so when you’re calculating the maximum amount that you can concessionally contribute, be sure to take that into account.
Can I make extra payments into my super?
Generally, most people can make extra payments into their superannuation, but there are limits on how much you can contribute, both in relation to before-tax payments and after-tax payments.
Some types of superannuation payments you need to know about are:
- Superannuation Guarantee
- Salary Sacrifice
- Low Income Super Contribution
- After-tax contribution
If you’re comparing Superannuation funds, the comparison table below displays some of the products currently available on Canstar’s database for Australians aged 30-39 with a balance of up to $55,000, sorted by Star Rating (highest to lowest), followed by company name (alphabetical). Use Canstar’s superannuation comparison selector to view a wider range of super funds.
Fee, performance and asset allocation information shown in the table above have been determined according to the investment profile in the Canstar Superannuation Star Ratings methodology that matches the age group you selected.