Did you know that there are limits, AKA ‘caps’ on how much money you can add to your super every year? If not, you’re in the right place.
The figures on this page are correct as at 14 December 2023 for the 2023-24 financial year. For the latest, and historical, super rates and thresholds refer to the ATO website.
If you want to check your caps, we’ve made it SUPER easy, simply log in to your account and head to the Contribution Caps page. Please note the contribution information shown will be for your super account(s) with GuildSuper only for the current financial year. If you make contributions to another super fund(s) (including contributions that your employer or spouse might make on your behalf), or have made contributions in prior years, make sure you take these into account as they will count towards the limits for the current financial year.
First things first, there’s a couple of different types of contribution caps.
One applies to before-tax contributions, and the other to after-tax contributions. If you go over either of these caps, you might end up paying extra tax on your super.
Before we get into the caps, let’s do a quick recap on what counts as before or after-tax contributions
Before-tax contributions include:
Super payments from your employer
Salary sacrificed contributions
Any after-tax contributions you’ve claimed a tax deduction on
After-tax contributions include:
Voluntary payments you make after income tax has been taken out
Any SUPERSUPER contributions
In most cases, you can contribute up to $27,500 before tax to your super each financial year, and this is taxed within the Fund at 15%.
If you’re contributing more than that, you may pay an extra 15% tax, meaning you’ll pay an overall 30% on some, or all of the contributions.
If you are not making pre tax contributions the most common way you might accumulate more than $27,500 to your super is if you earn over $250,000 a year from your combined income and Superannuation Guarantee (SG) payments. But you could also exceed this cap if:
You’re adding to your super through salary sacrifices
Or you’re making after-tax contributions, but are claiming a tax reduction on these payments.
Going over your before-tax cap isn’t something to worry about. You’re still on your way to a fab retirement! But just so you're aware, these are the things that could happen if you exceed it.
Any contributions you make over the cap will be taxed at your marginal income tax rate, minus a 15% tax rebate. You may also be charged interest. If you’re not sure what a marginal tax rate is, you’re not alone! Your marginal tax rate all depends on your taxable income each financial year.
Here's an example. If your taxable income for the 2023-24 financial year was $45,000, your marginal tax rate would have been 19%. As your income increases, typically so does your marginal tax rate. So in this case, any before-tax contributions you make over the cap would be taxed at 19%.
So, at the end of the financial year – yes, tax time, our favourite time of year – the ATO will give you two options:
Withdraw 85% of the excess contributions for that year
Leave the excess contributions in your super, where they’ll be taxed at your marginal rate, and then count towards your after-tax contributions instead
The simple answer is yes, in some cases.
You may be able to carry over unused portions of your limit over a rolling five-year period. It’s worth mentioning, there are some eligibility requirements for this:
You’ll need to have a total super balance of less than $500,000 across all your super accounts – that includes any accounts you hold outside of Child Care Super.
You must have contributed less than the before-tax cap for one or more of the previous five years.
If you want to know more about before-tax contribution caps, head to the ATO website.
Ok, so you know all about before-tax contributions. Now let’s talk after-tax contributions.
Usually, you can add up to $110,000 to your super each financial year as after-tax contributions. There is no 15% contributions tax payable on these contributions.
An exception to the usual limit is if you have a total super balance of $1.9 million or more. In this situation, your after-tax contributions cap is reduced to $0, meaning if you add any after-tax contributions, they’ll be taxed.
The bad news is any excess after-tax contributions are taxed at 47%.
The good news is, at the end of the financial year the ATO will give you two options:
You can withdraw the excess contributions, plus 85% of any earnings on these contributions.
Or you can leave the contributions in your super, where they’ll be taxed 47%.
SUPER important info: Some types of after-tax contributions, such as downsizer contributions, aren't included in the cap. You can read more about this on the ATO website.
This depends on your super balance, your age, and whether you’ve already brought your cap over from previous years.
To bring forward your after-tax contributions, you must:
be under 75
have not brought forward any after-tax contribution caps in recent years
have a total super balance at 30 June of the previous year that is less than the transfer balance cap
If you want to know more about before-tax contribution caps, bring forward rules and the transfer balance cap, head to the ATO website.
The rules are quite complex, and it’s important to get it right, so we recommend you reach out to your financial adviser, if you have one. You also have access to our team of financial advice Coaches who can provide you with advice about your contributions, within your Child Care Super account, at no additional cost to you.
You can contact the Coaches by calling 1300 262 240 or by emailing email@example.com
Page last updated 13 December 2023