Exceeding the upper ceiling for super contributions can attract penalty. It is not the first time that somebody is saying this. On the morning of 1 July, the caps changed both for concessional and non-concessional contributions. For at least some time, the super contribution caps are expected to stay where they are.
Concessional contribution caps
It will be in wisdom to figure out where we stand after these changes have come into effect. From now on, concessional contribution ceiling for individuals under 49 years of age will be $30,000. For those who are 49 and above, the same ceiling will be $35,000.
Non-concessional contribution caps
Non-concessional contribution is segregated for members who are under 65 years of age and those who are either 65 or over. For the former, the ceiling is $180,000 and you are permitted to contribute $540,000 over three-year tenure under the new bring-forward rule. For those who are 65 and over, the work test applies — I mean the “40 hours for 30 consecutive days” rule.
What counts towards the cap
Apart from the employer contributions (which presently stand at 9.5%), salary sacrifices and personal contributions also count towards this cap. If you live in the fear of exceeding your contribution cap, here are a few pointers you must ponder over.
- How timely does your employer contribute? Employers get 28 days after the end of a quarter and your contribution caps are read in the light of the day the contributions are made not when they are earned.
- Incongruous bonuses and commissions force higher Super guarantee entitlements so it is worth prefiguring whether your employer pays any SG on bonuses or commissions.
- Are you being paid 27 times a year when 26 is the maximum you are allowed?
- How are you placed in terms of salary hike? Increase in salary enhances your SG contribution.
Some of these questions need immaculate understanding. If you want to know anything in particular, feel free to get in touch with me.