Contribution caps¶

Super gets special tax treatment, so there are yearly limits on how much can go in. These limits are called contribution caps. There are two caps: one for before-tax money and one for after-tax money. Going over a cap can mean extra tax, so it helps to know how they work.

In one line

There is a yearly cap on before-tax (concessional) contributions and a yearly cap on after-tax (non-concessional) contributions, both set and indexed by the ATO.

Why this matters¶

The caps decide how much you can add to super each year before extra tax kicks in. If you salary sacrifice, claim a deduction for personal contributions, or add large after-tax amounts, staying inside the caps keeps the tax benefits and avoids a nasty surprise at tax time.

What you will learn¶

The two main caps and what each one covers
How carry-forward lets you use unused concessional cap
How the bring-forward rule works for after-tax contributions

Understanding the concept¶

There are two caps:

Concessional (before-tax) cap. This covers money that goes into super before tax, such as your employer's super, salary-sacrifice amounts, and personal contributions you claim as a tax deduction. These are taxed at a lower rate inside the fund.
Non-concessional (after-tax) cap. This covers money you pay in from income you have already paid tax on, and do not claim as a deduction.

The ATO sets each cap and indexes it (adjusts it over time), and the non-concessional cap is worked out as a multiple of the concessional cap. Because the amounts change from year to year, always check the current figures on the ATO website rather than relying on last year's numbers.

Two extra rules give some flexibility:

Carry-forward (concessional). If you do not use all of your concessional cap in a year, you may be able to carry the unused part forward and use it in a later year. The ATO allows unused amounts to be carried forward for up to five years before they expire, and only if your total super balance is under a set limit. This helps people with uneven incomes catch up.
Bring-forward (non-concessional). If you want to put in a large after-tax amount in one year, the bring-forward rule may let you use up to a few years' worth of after-tax cap at once, instead of spreading it out. Whether you can, and how many years you can bring forward, depends on your age and your total super balance.

If you go over a cap, extra tax and other steps can apply. That is covered in the excess contributions lesson.

For accountants & bookkeepers

Concessional carry-forward requires a total super balance under the set threshold (currently $500,000) on 30 June of the prior year, using unused cap from up to the five previous years, not before 2018-19. The non-concessional cap is a multiple of the general cap under bring-forward, and can be nil where the client's total super balance is at or above the general transfer balance cap on the prior 30 June. Both caps are indexed — confirm the current figures on the ATO's contributions caps page each year rather than reusing last year's numbers.

Example¶

Priya's employer pays super for her during the year, and she also salary sacrifices some of her wage into super. Together, those before-tax amounts stay under the concessional cap for the year, so they get the lower tax rate inside the fund.

A few years earlier, Priya worked part-time and did not use all of her concessional cap. Because her total super balance is under the limit, she is able to carry that unused cap forward and make a larger before-tax contribution this year to catch up, without going over.

Common mistakes¶

Forgetting employer super counts towards the concessional cap — it is not just salary sacrifice.
Assuming the caps never change — the ATO indexes them, so last year's figure may be out of date.
Thinking carry-forward and bring-forward are the same — carry-forward is for the before-tax cap, bring-forward is for the after-tax cap.
Making a big after-tax contribution without checking whether bring-forward applies to you.

How this works in myaccountant¶

In the app — your contribution caps are tracked by the ATO across all your funds, not inside myaccountant, so caps are managed with the ATO and your fund. What myaccountant does handle is the employer and salary-sacrifice super that flows through payroll — the before-tax contributions that count towards the concessional cap — and the reporting of those amounts.

Key points¶

There is a before-tax (concessional) cap and an after-tax (non-concessional) cap.
Employer super, salary sacrifice and deducted personal contributions use the concessional cap.
The ATO sets and indexes both caps, so check the current figures each year.
Carry-forward lets you use unused concessional cap from earlier years.
Bring-forward lets you use future after-tax cap in one year, based on age and balance.
Going over a cap can mean extra tax — see the excess contributions lesson.

Learn next¶

General information only — not tax, super or financial advice.

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