Contribution limits

Pre-tax contribution limit

The ATO will monitor your pre-tax contributions and send you a tax bill if you exceed the limits. Contributions up to the $25,000 limit will be subject to 15% contributions tax. Pre-tax contributions in excess of the pre-tax contributions limit will be taxed at 46.5% and will count towards your post-tax contribution limit.

The pre-tax contributions limit for the current financial year is $25,000 pa per person and will be indexed to Average Weekly Ordinary Time Earnings (AWOTE) but indexation will only take effect once it exceeds the existing cap by $5,000.

The limit includes:
  • employer contributions
  • salary sacrifice contributions
  • pre-tax contributions made to your account and split to your spouse under the Contribution Splitting rules
  • all your pre-tax contributions to all your super funds.

It is now considered unlikely that insurance premiums paid indirectly by employers through allocation of surplus or reserves on behalf of their employees will be considered pre-tax contributions and count towards a member's pre-tax contribution limit. However until this is confirmed by Treasury or the ATO, members may wish to take a conservative position and assume that the premiums paid by your employer for your base death and TPD cover may be counted against the relevant contribution limit. To find out if your employer pays your insurance premiums, log into SuperOnline and download a Super Statement.

Transitional Arrangements

During the period 1 July 2009 to 30 June 2012 the pre-tax contributions limit for persons aged 50 years and over will be $50,000 pa per person. The transitional limit will not be indexed but will remain at $50,000 pa per person throughout the transitional period. You are eligible to use the transitional limit of $50,000 pa provided you are aged 50 and over at the end of the financial year in which the contribution was made.

In the 2011 Federal Budget, the Government reaffirmed its earlier announcement of the permanent extension of the transitional pre-tax contributions cap for those aged over 50, with account balances of less than $500,000 commencing on 1 July 2012.

Post-tax contribution limit

The ATO will monitor your post-tax contributions and send you a tax bill if you exceed the limit. Contributions up to the limit will not be taxed upon entry to your super fund. Post-tax contributions in excess of the post-tax contributions limit will be taxed at 46.5%.

The post-tax contributions limit for the current financial year is $150,000 pa per person and will not be directly indexed but will remain at six times the pre-tax contributions limit, which is indexed.

If you are under 65 years, you will be able to bring forward two years of post-tax contributions and make a lump sum contribution of $450,000 in one financial year. So if you made a $450,000 contribution during the 2010/2011 financial year, you would not be allowed to make any further post-tax contributions until the 2013/2014 financial year.

If you are 63 or 64 years you are able to bring forward two years contributions without meeting the work test in the subsequent two years. If you are aged 65 years or over you cannot bring forward contributions.

The limit includes:
  • spouse contributions - but will count towards the receiving spouse's limit.
  • pre-tax contributions in excess of the pre-tax contributions limit.
  • transfers from overseas.
The limit does not include:
  • roll-overs from other super funds.
  • Government co-contributions.
  • proceeds from the disposal of eligible small business assets up to an indexed lifetime limit of $1,100,000 for the 2010/2011 financial year. This may include up to $500,000 of capital gains that are disregarded under the CGT exemption (known as the retirement exemption) and proceeds from the disposal of assets that qualify for the CGT exemption (including pre-CGT assets and assets disposed of after the permanent disablement of the owner).
  • proceeds from a settlement for an injury resulting in permanent disablement.