Paying extra into your superannuation now may make a big impact later in retirement. It could mean the difference between being able to afford regular holidays or dinners out, and still being able to pay your bills at age 100. Even a little bit may make a difference.
Select your option below to find out about different super contribution options.
Taken from your salary before tax, such as Superannuation Guarantee.
Any additional contribution you make that you have already paid tax on.
Available between the 2021/22 to 2029/30 financial years.
Changes that could impact your transition to retirement.
Your before-tax contributions (also known as Concessional Contributions) include your Superannuation Guarantee contributions, any other employer super contributions, salary sacrificing (if you do this) and any contributions that you have claimed a tax deduction for. Remember too that anyone who is eligible to contribute to super, can claim a deduction for personal contributions subject to meeting relevant criteria.
The general cap on before-tax contributions is $27,5001.
If you have less than $500,000 in total superannuation you can also carry forward your unused before-tax (concessional) cap amounts (accrued from 1 July 2018) for up to five years.
It is your responsibility to monitor your caps to avoid any additional tax that may apply if you exceed the caps.
First home buyers can contribute up to $15,000 per financial year (up to a maximum of $30,000) extra into their super to use as a deposit on their first home. Find out more about the First Home Super Savers Scheme here.
¹ For up to date information regarding the contribution caps refer to ato.gov.au.
Documents for download
Download the plain English guide to super contributions.
Making before-tax contributions
If you have spare cash on hand, whether from an inheritance, dividend payments, a bonus or even just change after bills, you might consider contributing this to your superannuation.
The cap on after-tax contributions (also known as non-concessional contributions) is $110,000 per financial year. You may also be able to bring forward up to three years of after-tax contributions to invest up to $330,000 in one go if you haven’t triggered it in the previous two years. Those with a total super balance of $1.7 million or more are not able to make after-tax contributions and those with a balance between $1.48 and $1.7 million will have a reduced ability to use the ‘bring forward’ rule.
It is your responsibility to monitor your caps to avoid any additional tax that may apply if you exceed the caps.
If you are aged between 67 and 74 years old and meet either the work test or work test exemption, you may also be able to make an after-tax contribution (the work test does not apply if you are under age 67).
The work test means you have been gainfully employed and worked at least 40 hours over 30 consecutive days in a financial year in which the contribution is made.
The work test exemption applies if you satisfied the work test in the previous financial year in which the contributions are made and you have a total super balance less than $300,000 at the end of the previous financial year and you have not used the work test exemption previously. The work test exemption can only be used once in your lifetime.
Those aged 65 and over can contribute up to $300,000 ($600,000 combined for a couple) to their super from the proceeds of selling their home (owned for 10 or more years). This measure is exempt from the $1.7 million balance, contribution caps and work test restrictions.
Documents for download
Download the plain English guide to super contributions.
Making after-tax contributions
Individuals will be able to recontribute COVID-19 early release superannuation amounts outside of the contribution caps between the 2021/22 to 2029/30 financial years.
This will allow individuals who have utilised the COVID early release scheme to make ‘re-contributions’ that do not count towards their non-concessional contributions cap (effective from 1 July 2021).
Recontribution of COVID-19 early super release
If you’re retired or about to retire, there are a few changes you should know about.
The maximum amount that can be invested in the retirement phase is generally $1.7 million* (2021/22) You may have a different limit due to timing and indexation impacts. If you’ve already retired and your balance exceeds your cap you are required to move the excess back to the accumulation phase or be subject to a tax penalty.
Transition to retirement pensions in accumulation phase are not assessed against the transfer balance cap until you reach age 65, or notify us that you have met a prescribed condition of release.
* For more information about the transfer balance cap and how it applies to your circumstances, speak with your adviser or refer to the ATO website at www.ato.gov.au.
Entering retirement
The amount you have in your superannuation at retirement can mean the difference between a modest lifestyle or a more comfortable one with a few luxuries.
*Before-tax (concessional) contributions are generally taxed at a concessional rate of 15%. Note: an additional 15% tax may be payable for higher income earners.
A concessional contribution is a payment to superannuation made before tax and includes the payments your employer might make on your behalf, for example Superannuation Guarantee. It also includes additional payments you make yourself through salary sacrificing or for which you claim a tax deduction.
Concessional contributions are taxed at a rate of 15%, instead of your marginal tax rate*. The cap on concessional contributions is $27,500 for the 2021/22 financial year.
A non-concessional contribution is a payment made to a superannuation fund after tax. It can be from a range of sources such as an inheritance, a property sale or even just additional payments from your after-tax salary. The cap on non-concessional contributions is $110,000 per financial year or up to $330,000 (2021/22) using the three-year bring-forward rule for those aged under 67 years old.
*Before-tax (concessional) contributions are generally taxed at a concessional rate of 15%. Note: an additional 15% tax may be payable for higher income earners.
To continue to make contributions, you will need to pass the work test – this means you will need to have worked 40 hours or more in 30 consecutive days during the financial year.
To avoid exceeding the caps, the general before-tax contributions cap is $27,500 while the after-tax contributions cap is $110,000 for the 2021/22 financial year, provided your total superannuation account balance is less than the transfer balance cap (currently $1.7 million) on the prior 30 June. It is your responsibility to monitor your caps to avoid any additional tax that may apply if you exceed the caps.
*Before-tax (concessional) contributions are generally taxed at a concessional rate of 15%. Note: an additional 15% tax may be payable for higher income earners.
Before making contributions to your super, you’ll need to do the following:
If you would like to make before-tax contributions:
If you would like to make after-tax contributions:
Others can also make a contribution on your behalf. If you would like more information on how to do this or making a contribution yourself, speak to one of our superannuation specialists on 132 135.
Visit the following link:
If your superannuation is linked to your Westpac Group bank account, other links include:
Small contributions to your super can make a big difference to your retirement income in the long run. Use our calculator to see how small savings on everyday items could impact your retirement.
Things you should know
This information is current as at 1 July 2021. This information has been prepared without taking account of your personal objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This information provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.
Superannuation is a means of saving for retirement, which is, in part, compulsory. The government has placed restrictions on when you can access your investment held in superannuation. The Government has set caps on the amount of money that you can add to superannuation each year on both a concessional and non-concessional tax basis. There will be tax consequences if you breach these caps. For more detail, speak with a financial adviser or visit the ATO website.
The tax position described is a general statement and is for guidance only. It has not been prepared by a registered tax agent. It does not constitute tax advice and is based on current tax laws and our interpretation. Your individual situation may differ and you should seek independent professional tax advice. For more information, visit the ATO website.
BT Funds Management Limited (BTFM) ABN 63 002 916 458, AFSL No. 233724, RSE No. L0001090 is the trustee and issuer of interests in BT Super for Life and BT Super which is are a part of Retirement Wrap ABN 39 827 542 991, RSE R1001327. A Product Disclosure Statement (PDS) for BT Super for Life and BT Super, and the BTFM Financial Services Guide (FSG) can be obtained by calling 132 135, or from the Product Disclosure Statement page. You should obtain and consider the PDS before deciding whether to acquire, continue to hold or dispose of interests in BT Super for Life and/or BT Super.
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