You could save 10% more into super
July 7th, 2021
On 1 July 2021, the amount you can contribute to super each financial year increased by 10%.
That’s because the Government lifted the contribution cap limits on concessional (before-tax) and non-concessional (after-tax) contributions.
Here are the new caps, effective 1 July this year.
| Contribution caps | 2020/21 (previous FY) | 2021/22 (current FY) |
| Concessional (before-tax) contribution cap | $25,000 | $27,500 |
| Non-concessional (after-tax) contribution cap | $100,000 | $110,000 |
WHAT DOES THIS MEAN FOR YOU?
You can now contribute more to your super account without worrying about an unexpected tax bill from the ATO for going over the limits.
Making extra contributions to super can help your balance grow faster, putting you on track for more income in retirement. The earlier you start contributing, the longer your super has to grow from compounding interest. So even small amounts can make a surprisingly big difference!
Contributing extra is flexible, with options to top up your super before tax through your employer or after tax from your bank account. Visit “Grow My Super” to see the many ways you can contribute.
CONTRIBUTION CAP OPPORTUNITIES
Did you know there are two super rules that could let you contribute MORE than the cap amounts in a single financial year? Here’s how.
- The carry-forward rule
Lets you “carry” any unused before-tax cap amounts from previous financial years into the current financial year. For example, if you used $20,000 of your $25,000 cap last financial year, you could carry the spare $5,000 into this financial year, giving you a total of $32,500 to play with.
- The bring-forward rule
Lets you “bring forward” future after-tax cap amounts into the current financial year. For example, if you had a windfall and wanted to contribute more than $110,000 to super, you could use this rule to contribute up to 3 years’ worth of after-tax cap amounts in a single tax year.
Both these rules provide huge flexibility for topping up your super balance. To make the most of the rules and ensure you’re using them correctly, contact us for help.
WHAT ELSE DO YOU NEED TO KNOW?
The contribution caps re-set each financial year, so on 1 July you started with $0 of contributions against your name. Until 30 June 2022, you can contribute as much as you want (or your circumstances allow) up to the new limits.
Remember, contributions from your employer (called Super Guarantee) count towards your concessional cap, so anything else you contribute before tax will be added on top.
The caps apply to ALL your super accounts collectively. So if you receive money to more than one super account, you may max out your limits sooner.
WE’RE HERE TO HELP
If you have any questions about the changing contribution caps, please call our Member Services Team on 1300 360 988 or email us.