FAQ: WHAT ARE CONCESSIONAL CONTRIBUTIONS AND THE APPLICABLE CAPS?

Concessional contributions include: employer contributions, salary sacrifice and self-employed contributions (if claiming a tax deduction).

 

An annual cap of $25,000 applies to concessional contributions. A transitional period applies to those aged 50 or over but under 75, until 30 June 2012. During this period the annual cap for concessional contributions for these members is $50,000 each financial year. The Government is reviewing the arrangements for the period commencing 1 July 2012.

 

Contributions received above your applicable cap are taxed at a further 30% (plus Medicare Levy). This is in addition to the 15% contributions tax deducted on receipt of the contribution. The taxed excessive contribution is then counted towards your non-concessional contributions cap of $150,000 p.a.

 

Local Super reports all concessional contributions to the ATO. The ATO will notify you if you exceed your applicable contributions caps.

 

The calculation of employer contributions for Salarylink members is calculated based on a formula provided in the legislation as 'notional taxed contributions'.

 

For further information regarding this calculation please contact Local Super directly.