Superannuation contribution limits: What you need to know

Superannuation contribution limits exist for a good reason: to encourage retirement savings while capping how much individuals can contribute tax-effectively. For the 2024–25 financial year, the Australian Taxation Office (ATO) has introduced new thresholds that could affect how you grow your super balance. Exceeding these caps may result in significant extra tax obligations, which makes it crucial to plan carefully.

In this guide, we'll break down the latest super contribution caps, the tax implications of going over and how smart planning can help you get ahead. And if you're looking for tailored advice, Wilson Porter's superannuation planning services can help you maximise your retirement savings with confidence.

What are concessional and non-concessional contributions?

Super contributions fall into two main categories — concessional and non-concessional. Each type has its own contribution limits, tax treatments and strategies for maximising your retirement savings. Understanding the difference between them is key to making informed decisions and staying within the ATO's rules.

Concessional contributions (Before-tax)

Concessional contributions include:

• Employer contributions, such as super guarantee (SG) contributions
• Salary sacrifice contributions made from pre-tax salary
• Personal contributions that you claim as a tax deduction

The concessional contributions cap for 2024–25 is $30,000.

If your total super balance (TSB) is under $500,000 at the end of the previous financial year, you can also take advantage of the carry-forward rule, allowing you to use any unused concessional contributions cap from the last five years.

Tip: Unused caps from 2018–19 onwards can be carried forward.

Exceeding the concessional cap means the excess concessional contributions will be taxed at your marginal rate, minus a 15% offset. You can elect to release up to 85% of the excess amount to help cover your tax bill.

For example, if Jordan contributes $35,000 and his cap is $30,000, the extra $5,000 is added to his taxable income. He pays marginal tax on it but receives a 15% offset for the tax already paid inside the fund.

Non-concessional contributions (After-tax)

Non-concessional contributions are made from after-tax income and include:

• Personal contributions without claiming a tax deduction
• Spouse contributions

The non-concessional contributions cap for 2024–25 is $120,000.

You can also trigger the bring-forward rule if you're eligible, contributing up to $360,000 over a fixed three-year period. This is available if you're under 75 and have a TSB below $1.66 million.

Here's a simplified table for bring-forward thresholds:

Total Super Balance (TSB)	Bring-Forward Cap
Less than $1.66M	$360,000
$1.66M to $1.78M	$240,000
$1.78M to $1.9M	$120,000
$1.9M or more	Nil (not eligible)

If you exceed the non-concessional cap, the excess amount may be taxed at the top marginal tax rate unless you choose to withdraw the excess and associated earnings.

For full details, visit the ATO's contribution caps page.

Age and contribution limits: Who can contribute and when?

Your age affects what kinds of super contributions you can make and when. It's important to know the rules, especially as you approach milestones like turning 67 or 75, so you don't miss opportunities or get caught by restrictions.

Contribution age rules

You can generally make voluntary super contributions if you're under 75. After your 75th birthday, most voluntary contributions are restricted unless made within 28 days of the month you turn 75. Between 67 and 74, if you want to claim a tax deduction for personal concessional contributions, you must satisfy the work test (gainfully employed for at least 40 hours over 30 consecutive days).

Timing matters

When it comes to super contributions, timing is critical. Contributions are counted based on when they are received by your super fund — not when you send the payment. This makes it especially important to plan ahead as the end of the financial year approaches, ensuring your contributions are processed before June 30 if you want them to count for that year's tax benefits.

There are a few important rules to keep in mind. If you're wondering about age limits, you can generally contribute until you turn 75, after which voluntary contributions are heavily restricted. For those aged between 67 and 74, claiming a tax deduction for personal concessional contributions requires meeting the work test, meaning you must work at least 40 hours within a consecutive 30-day period. Additionally, if your total super balance exceeds $1.9 million, your ability to make non-concessional contributions stops, as your cap drops to zero.

Super contribution strategies to stay compliant and get ahead

Managing your super contributions carefully can boost your retirement savings and reduce your tax. Understanding the key strategies helps you make the most of your contribution caps while staying on the right side of ATO rules.

Salary sacrifice vs. personal contributions

Salary sacrifice involves making contributions from your pre-tax income, lowering your taxable income immediately. Personal contributions, made from after-tax income, can be claimed as a deduction later. Salary sacrifice often works best for employees with stable income, while personal contributions offer flexibility for those with variable earnings.

Catching up on unused caps

If your total super balance was under $500,000 at the end of the last financial year, you can use unused concessional caps from the past five years. This catch-up strategy is especially handy in high-income years when you want to maximise contributions and reduce your taxable income.

Using the bring-forward rule wisely

Eligible individuals can contribute up to three years' worth of non-concessional contributions in one go. This strategy is useful when selling major assets or planning for retirement. However, eligibility depends on your total super balance, and triggering the bring-forward rule without checking can limit future contribution options.

Track contributions across funds

Contributions are counted per person, not per fund. If you have multiple super accounts, it's critical to track all contributions to avoid exceeding the caps. Timing matters too: contributions are counted when your fund receives the money, not when you transfer it. Delays near 30 June can push contributions into the next financial year.

If you exceed a cap, contact your fund or the ATO quickly. You may be able to withdraw the excess and avoid further penalties.

Tax implications of exceeding super caps & future considerations

Exceeding your super contribution caps can lead to costly tax consequences. Suppose you go over the concessional contributions cap. In that case, the excess is added to your taxable income and taxed at your marginal rate, although you'll receive a 15% offset to account for the contributions tax already paid.

Exceeding the non-concessional contributions cap is even more serious — the excess may be taxed at the top marginal rate of up to 47%, unless you choose to withdraw the excess and any associated earnings.

If you receive an excess contributions determination from the ATO, you have 60 days to elect to release the excess amount. Acting quickly is important. You can make this election through ATO online services or by contacting your super fund directly.

Another important threshold to watch is the Transfer Balance Cap (TBC), which limits how much you can transfer into a retirement phase pension. For 2024–25, the TBC is $1.9 million. Suppose your total super balance exceeds this cap at the end of the financial year. In that case, your non-concessional contribution cap for the following year will be reduced to zero, meaning you cannot make further after-tax contributions without facing penalties.

Both concessional and non-concessional contribution caps are indexed in line with the Average Weekly Ordinary Time Earnings (AWOTE). This procedure involves periodically reviewing contribution limits to keep pace with inflation, resulting in gradual increases over time.

Staying informed about these changes is essential for effective retirement planning. For the latest updates, you can always refer to the ATO's official contribution caps resource.

FAQ

What's my bring-forward cap if I have more than $1.66 million in super?
If your TSB is between $1.66M and $1.78M, you can bring forward $240,000. Above $1.78M, it's $120,000 or nil.

What happens if I put more than $30,000 into super?
The excess will be taxed at your marginal rate (for concessional contributions).

Can I contribute to super after 75?
Only compulsory employer contributions and downsizer contributions are allowed.

Do contribution caps apply to defined benefit accounts?
Special rules apply; notional taxed contributions are used to assess limits.

How do higher interest rates impact super contributions?
Higher rates can boost super fund earnings but may affect voluntary contribution behaviour.

Get expert help to optimise your superannuation

Navigating superannuation contribution limits demands precision. Mistakes can be costly — but with professional support, you can make the most of available opportunities while staying compliant.

Learn how Wilson Porter can help you maximise super contributions while staying compliant.