Contributions

Super can be a tax effective way to grow your savings as it allows you to avail of concessional rates of tax compared to other types of investments. However, there are limits or caps in place on how much you can contribute to your super on the tax concessional basis in any financial year. The table below has details of the concessional tax rates and the contribution limits.

Tax Rates and Contribution Limits for the 2019-20 Financial Year

 

Before Tax

(Concessional)

After Tax

(Non-Concessional)

Types of contributions included

Employer contributions

 

Salary sacrifice

 

Personal

Personal

 

Spouse

 

Government co-contribution1

Contribution Cap

$25,0002 per year

 

 

$100,000 per year

 

Individuals with a total superannuation balance of $1.6 million or more will have a non-concessional contributions cap of nil. If you are under age 65, depending on your total superannuation balance, you may be eligible to contribute up to three times the annual non-concessional contributions cap in a single year. See the ‘Contributions cap’ section for further information.

Tax on contributions up to the cap

15%

 

If your income and low tax contributions (i.e. concessional contributions less any excess concessional contributions) exceed $250,000 p.a. in a financial year, you will be liable for an additional tax of 15% (on the lesser of the excess amount over $250,000 and the contributions).

Nil

Tax on excess amounts breaching the cap

Your marginal tax rate3 (less a 15% tax offset) plus an excess concessional contributions charge. (You have the option to withdraw from your Media Super account any excess concessional contributions made.)

47%3 (You have the option to withdraw from your Media Super account any excess non-concessional contributions made and 85% of associated earnings.)

1. Government co-contributions are not counted towards your non-concessional contributions cap.

2. Indexed annually in line with average weekly ordinary time earnings in increments of $2,500 (rounded down). Depending on your total superannuation balance, you may be eligible to carry forward any unused portion of your concessional contributions cap to add contributions above the cap in subsequent years. See the ‘Contributions cap’ section for further information.

3. Including the Medicare Levy.

Note: The contribution caps apply to all contributions made by you, or on your behalf, in the financial year to all of your super funds.  As Media Super will not be aware of your contributions to other super funds, it is up to you to monitor the total amount of contributions made by you or on your behalf in any financial year.

What if I exceed my contribution cap?

If you exceed the contribution caps the Australian Taxation Office (ATO) will send you an assessment notice advising you of the additional tax, how to pay it and whether you are eligible to apply for a refund of your excess contributions.

For excess concessional contributions, you can elect to pay the additional tax from your super account or another source or a combination of both. You will be required to advise the ATO of your payment method of choice and pay extra tax and any penalty within the timeframe specified. If you choose to pay the tax or a portion of the tax from your super account, you must provide an ATO Voluntary Release Authority to allow your fund to release the amount from your super account.

Additional tax payable on excess non-concessional contributions must be deducted directly from your nominated superannuation account. You will need to provide an ATO Compulsory Release Authority to authorise your fund to release the excess tax amount.

What if I have not provided my TFN?

If Media Super does not hold your Tax File Number (TFN) at the end of the financial year, you may end up paying additional No-TFN tax at 30% (plus Medicare Levy) on your employer contributions and any tax deductible personal contributions. However, you may be apply for a refund of this no-TFN tax if you supply your TFN to Media Super within the three financial years following the financial year that the no-TFN contributions were paid.

Media Super cannot accept your non-concessional contributions unless we have a valid TFN on record for you.