Contribution caps to increase from 1 July
Concessional contributions are contributions that are made into your super fund before tax. They are taxed at a rate of 15% in your super fund.
Non-concessional contributions are:
- from your after-tax income
- not taxed in your super fund.
The annual concessional contribution (CC) and non-concessional contribution (NCC) caps will increase from 1 July 2021. This may impact contribution strategies and create advice opportunities, now and in the coming years.
The CC cap is indexed in line with AWOTE (average weekly ordinary times earnings) and is increased in increments of $2,500 (rounded down). The NCC cap is four times the general CC cap.
The following table summarises the caps in 2020/21 and from 1 July 2021.
|
Cap |
2020/21 |
From 1 July 2021 |
|||
|
Concessional |
$25,000 |
$27,500 |
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|
Non-concessional |
$100,000 |
$110,000 |
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|
Non-concessional |
Up to $300,000 |
Up to $330,000 |
Note: Any unused CCs that a person has accrued will be added to the annual CC cap for the year to determine that person’s personal CC cap. To be eligible to use catch-up CCs, their total super balance (TSB) must have been less than $500,000 at the prior 30 June. This doesn’t impact the NCC cap.