Superannuation contributions 2021/2022
Superannuation remains a tax advantaged long term investment which will benefit from compounding over the years for retirement.
Concessional/deductible contributions by employers for employees
Maximum contributions for each employee up to 75 years of age, including “salary sacrifice” (needs to be proactive) and superannuation guarantee payments without incurring excess concessional contributions tax: $27,500.
- Between 67–74 years must satisfy the work test and only contributions received before the 28th day after the end of the month in which member turns 75 are deductible. (This condition applies to non-mandated contributions – e.g. salary sacrifice. Mandated contributions such as super guarantee can be made regardless of age and no minimum hours required.)
- Contributions need to be received by the fund by the 28th of the month following quarter end.
Concessional/deductible personal contributions by individual taxpayers, including investors
Maximum contribution by each individual up to 75 years of age without incurring excess concessional contributions tax: $27,500.
- The individual must notify the fund of intention to claim a deduction (form NAT 71121) and the fund must acknowledge the notice.
- Contribution cannot create or increase a loss (deduction cannot exceed taxable income).
- Over 67 years must satisfy work test to be able to claim a deduction.
- For individuals turning 75, only contributions received before the 28th day after the end of the month in which member turns 75 are deductible.
From 2022-2023 financial year onwards, funds can accept non-mandated contributions for members under 75 years of age and there is no requirement to meet the work test.
High income earner contributions (Division 293)
From 1 July 2017, an additional 15% “contributions tax” is applied to those with adjusted taxable incomes (broad definition) exceeding $250,000.
Non-concessional/non-deductible contributions by individual taxpayers
Maximum contribution by each individual up to 75 years of age without incurring excess non-concessional contributions tax: $110,000 subject to individual’s total superannuation balance.
- Over 67 years the work test will need to be satisfied. From 1 July 2022 work test for 67 to 74 year olds not required for voluntary or salary sacrifice contributions.
- An individual taxpayer who is under 67 years of age in an income year can bring forward two years’ entitlements and make one contribution of $330,000, subject to the individual’s total superannuation balance, without exceeding the cap – i.e. no further contributions over the three years (from 1 July 2022 those under 75 years are eligible).
- If an individual’s total superannuation balance at 30 June 2017 was $1.6m or higher and at 30 June 2021 $1.7m or higher, the non-concessional cap will be nil.
Excess concessional/deductible and non-concessional/non-deductible contributions
From 1 July 2013 excess concessional (only) contributions will be taxed at the member’s marginal tax rate with tax offset and an interest charge applied. The excess may be withdrawn from the fund.
The punitive tax rate of 47% remains for excess non-concessional contributions.
The co-contribution made by the Government of up to $500 is available to employees and the self-employed less than 71 years of age at the end of the income year who make non-concessional/ undeducted personal superannuation contributions of up to $1,000 and whose total income (assessable, reportable employer superannuation contributions and reportable fringe benefit amounts) is less than $56,112; the lower threshold of $41,112 allows for the full co-contribution 50c/$1.
- 10% or more of the person’s total income is attributable to employment or carrying on of a business.
- Total superannuation balance must be less than the $1.7m cap at 30 June the previous year.
Government contributions for low income earners (LISTO)
From 1 July 2017, a low income superannuation tax offset is available calculated at 15% of concessional contributions made by or on behalf of individuals less than 71 years of age with adjusted taxable incomes of up to $37,000 matched by the Government up to an annual maximum amount payable of $500.
Contributions for spouse – tax offset
A taxpayer making a personal non-concessional/non-deductible contribution for his/her non-working or low income spouse is eligible for a tax offset of up to $540 where a contribution of up to $3,000 is made for a spouse whose assessable income, reportable fringe benefit and reportable superannuation contribution amounts do not exceed $37,000. The offset is phased out at $40,000.
No work test is applied if the spouse is under age 67, but between 67 and 74 years of age the spouse must satisfy the work test. Offset applies if spouse was under 75 years of age at the time of the contribution.
Fund acceptance of contributions – age and work test
A regulated superannuation fund may accept contributions as follows:
- If the member is under age 67
– all contributions made
- If the member is 67 or more but under 75 years
– mandated employer contributions
– employer or member contributions, provided the work test is satisfied. Contributions for member turning 75 may be accepted up to the 28th of the month of 75th birthday.
- If the member is 75 years or more
– mandated employer contributions
A person satisfies the work test if gainfully employed at least 40 hours in a period of not more than 30 consecutive days in that financial year.
Superannuation guarantee contribution rate
From 1 July 2014, the contribution rate increased from 9.25% to 9.5% and remained so until 1 July 2021 when it increased by 0.5%. The 2021/2022 SGC rate was 10% and the 2022/2023 rate is 10.5%.
The minimum monthly wage of $450 to qualify for super guarantee contributions has been scrapped effective 1 July 2022.
Reportable employer super contributions
From 1 July 2014, the payment of salary sacrifice superannuation and other additional* superannuation over and above the compulsory superannuation guarantee charge, paid by employers for employees, will need to be recorded on employees’ year end PAYG summaries.
*Where employee influences the rate or amount of employer contributions. An employee is considered to have the capacity to influence if he or she can directly negotiate the rate or amount of employer contributions.
As a guideline, the capacity to influence may be shown by:
- The employer’s relationship with the employee. For example, the employee is the spouse of the employer.
- The employee’s involvement in negotiations/preparation concerning the terms of any industrial agreement governing super contributions.
- The amount contributed for the employee relative to the compulsory contributions the employer is required to make.
- The employer’s super contribution arrangements for other employees.
- Any non-arm’s length dealings.
Unused concessional/deductible contributions (both for employers and individual taxpayers, including investors)
From 1 July 2018, where an individual’s superannuation fund balance is less than $500,000 (as at previous 30 June), unused concessional contributions (up to the maximum $25,000 each year) may be aggregated and claimed on a rolling five year basis. The unused contributions are available for a maximum of five years, expiring after five years. The unused contributions can be accessed from 1 July 2019 and contributed in addition to the $25,000 / $27,500 cap already allowed.
Notice of intention to claim “catch up” needs to be provided to the fund and, if over 67 years, the work test needs to be satisfied. From 1 July 2022 no work test applies for non-mandated contributions for those less than 75 years of age.
Home proceeds (known as “downsizing”, one-off contribution, not subject to usual cap)
From 1 July 2018 proceeds from sale of home may be contributed, subject to:
- Individuals aged 65 years or more (from 1 July 2022 aged 60 years or more)
- Proceeds from sale of primary dwelling / main residence
- Lived therein and owned for at least 10 years
- Provided house sells for at least $600,000, each joint owner may contribute up to $300,000
- Contribution must be made within 90 days of receiving the proceeds of sale (usually settlement)
- Contract must be signed on or after 1 July 2018
- Usual age and work tests not applicable