Concessional super contributions are part of most employee’s salary package (Super Guarantee contributions). These contributions are made into the employee’s super fund before tax. The contributions are then taxed concessionally at the special low rate of 15%. Please note, the concessional contributions are capped at $25,000 each financial year. The cap may be higher if a taxpayer did not use the full amount of their cap in earlier years. This is called the carry-forward of unused concessional contributions.

Non-concessional super contributions are made from the after-tax income and are not taxed in the super fund. Please note, the non-concessional contributions are capped at $100,000 each financial year. The cap may be higher if a taxpayer can use the carry-forward arrangements.

A taxpayer may be able to claim a tax deduction for their personal super contributions from their after-tax income. In order to claim a deduction for this type of contribution, a special notice of intent needs to be given to the super fund and then an acknowledgement letter must be received from that fund. The after-tax personal super contributions that are claimed as deductions will count towards the concessional contributions cap and will be taxed concessionally at the special low rate of 15%.

Additional tax may apply to concessional contributions – see Division 293 https://www.swotaccountants.com.au/what-is-division-293-tax/

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