Don’t leave your contributions to the last minute
This is particularly important if you plan to claim a tax deduction for any of your contributions. Contributions are included in a financial year if they are received in your fund’s bank account by 30 June. With 30 June falling on a Sunday this year, it would be prudent to make your contributions by Wednesday 26 June to ensure they are received by your fund prior to the end of the financial year.
Please also remember retail and industry funds can take extra time to process contributions, so we suggest that you make contributions as soon as possible.
Further, please check the payment methodology required by your particular fund as they typically have specific BPAY codes or electronic funds transfer instructions for different types of contributions and it is problematic to have the contributions reallocated after year end if you use the wrong code or EFT account.
Superannuation Contribution Limits
The *concessional and non concessional contribution limits are as follows:
|Financial Year||Concessional Cap||Non Concessional Cap|
- If you intend on claiming an income tax deduction for your personal contributions, you must complete a notice of intent to claim deduction in the approved form and submit it to your super fund when making the contribution.
- If your Total Super Balance at 30 June 2018 is greater than $1.6M you are ineligible to make a Non Concessional Contribution in the 2018/19 financial year. (Your Total Super Balance is the combined total of all balances in super funds of which you are a member.)
- If you were age 64 or under on 1 July 2018, you may have the ability to ‘bring forward’ the non-concessional contribution limit for the following two years. The amount of the bring forward that can be triggered in a particular year will be driven by the gap between your total super balance and $1.6m. If the gap is less than $100,000, you cannot trigger a bring forward in that year. Rather, you will be limited to the annual limit of $100,000. If your total super balance is less than $1.4m at 30 June 2018 you may be eligible to trigger the bring forward and utilise the whole limit of $300,000.
If you are aged 65 to 74 years, you must satisfy a work test in order to be eligible to contribute to super. To satisfy the work test, you must have worked at least 40 hours in a consecutive 30-day period in the financial year before the super fund is eligible to accept your contribution. If you are aged 75 or over, your super fund is only able to accept mandated employer contributions (i.e. superannuation guarantee amounts) on your behalf.
Drawing super pensions
If you are in pension phase, you need to ensure the minimum pension has been paid to you for this financial year. Where these requirements have not been met your fund will be subject to 15% tax on your pension investment earnings, rather than being tax free. For our SMSF clients, please contact us if you are not sure of your minimum pension requirement for 2018/19.
Super tip for employers
Employers only receive a tax deduction for making their employee SG contributions in the same financial year in which the SG contributions are received by the super fund. Therefore, please ensure you make your payments as soon as possible if you want to claim a deduction for them in the current financial year.
Otherwise, please ensure the June 2019 quarter contributions are paid by 28 July 2019. Missed payments may attract the super guarantee charge (SGC), which is not tax-deductible.
*Concessional and Non-concessional Contribution Definitions
These are tax deductible contributions that include:
- employer contributions, such as
- compulsory employer contributions paid by your employer (E.g. 9.5% super)
- additional pre-tax super contributions your employer makes
- salary sacrifice payments of your choice
- other amounts paid by your employer from your pre-tax income to your super fund such as insurance premiums paid on your behalf.
- contributions that you claim personally as an income tax deduction, either to offset investment income or as a self employed person or as an individual topping up your employer contributions to the $25k Cap.
- notional taxed contributions if you are a member of a defined benefit fund.
- life insurance premiums paid into a superannuation life policy.
Non Concessional Contributions
These are after tax contributions from a personal source that are not taxed upon receipt in the super fund.
How can we help?
If you have any questions or would like advice to ensure you and your fund are well prepared for the end of the financial year and beyond, please contact our team of Super advisors on +61 2 9981 2300 or use the below button.