The ATO (Australian Tax Office) confirms the new max contribution amounts for the 2 major contributions methods – before (Concessional) and after tax (Non-Concessional) that begin form 1 July 2017.
From the ATO site –
Concessional (pre-tax) contributions to your super include employer contributions and any amount you salary sacrifice* into super. Personal contributions you claim as a personal super contribution deduction also count as concessional contributions. As these contributions are paid before tax is applied, it means that your super fund pays 15% tax on the contribution when it is paid to them.
From 1 July 2017, the concessional contributions cap is $25,000 for everyone. Previously it was $30,000 for people 50 years and older at the end of the previous financial year and $35,000 for everyone else. The new cap will be indexed in line with average weekly ordinary time earnings (AWOTE), in increments of $2,500 (rounded down).
The intent of this change is to better target tax concessions to ensure the super system is equitable and sustainable.
Non-concessional (after-tax) contributions include personal contributions for which you do not claim an income tax deduction. If you have more than one super fund, all non-concessional contributions made to all of your funds are added together and counted towards the non-concessional contributions cap.
From 1 July 2017, the annual non-concessional contribution cap will be reduced from $180,000 to $100,000 per year. This will remain available to individuals between 65 and 74 years old if they meet the work test. The cap will be indexed in line with the concessional contributions caps.
If you have a total super balance greater than or equal to the general transfer balance cap for the year ($1.6 million for the 2017–18 financial year) at the end of 30 June of the previous financial year, and you make non-concessional contributions, they will be excess non-concessional contributions.
See examples and more detail on the ATO site at the links above
Interested to know what self-managed super (SMSF) is all about, and if it is for you? See the slides SMSF Roadmap Overview.
If you want experts who have years of helping others, without the hype – then call for a FREE strategy session today and see how our Super-Connector Service assists you to find the right expert to answer your question – it’s FREE also!
No obligation. 0407 361 596, Paul.
Also get your FREE Expert Guide – Self-Managed Super and You – top right hand side above.