Keep up to date with the latest rates and contribution limits.
1. Concessional contribution limits
Annual contribution limits for 2016/17 financial year:
|Concessional contributions (before-tax)|
|Age 49 and over on 30 June 2016||$35,000|
2. Non-concessional contribution (after-tax) limits
The Government announced in the Federal Budget that from 7.30pm (AEST) on 3 May 2016, non-concessional (after-tax) contribution caps have been replaced with a $500,000 lifetime cap. This cap takes into account all after-tax contributions made since 1 July 2007. It applies to individuals aged up to 75 years.
If you had exceeded the lifetime cap prior to 7.30pm on 3 May 2016, don’t worry. Your existing contributions will not be subject to any penalty. Just remember, you will not be able to make further after-tax contributions without penalty.
This proposal has not been legislated. For more information see our Federal Budget 2016 update.
Annual contribution limits for the 2016/17 financial year:
|Non–concessional contributions is $180,000|
|If you are under age 65, you can make non-concessional contributions of up to $540,000 under the bring forward provision (i.e. contributing three years of contributions in one year).|
3. Government co-contribution
The government co-contribution is an initiative to help individuals save for retirement. If you earn $49,488 or less and make after-tax contributions to your super, the government will pay up to 50 cents for every dollar you contribute, subject to a maximum of $500 per year. The amount they match will be added to your super account.The maximum super contribution payable, and the way it is calculated, depends on the financial year in which you make your eligible personal contribution.
|Year of entitlement||Maximum entitlement||Matching rate||Lower threshold||Higher threshold|
4. Low Income Superannuation Contribution (LISC)
Since 1 July 2012, workers with an income of up to $37,000 automatically receive a refund of up to $500 to their superannuation savings from the government. This means workers effectively pay no tax on the Superannuation Guarantee (SG) contributions paid by their employer. For more information about the LISC visit the Australian Taxation Office (ATO) website.
5. Spouse contributions
A spouse contribution is an after-tax contribution to a superannuation account held in your spouse’s name. In other words you’re investing money into your spouse’s super account rather than your own.
You can make spouse contributions for your spouse at any time before their 65th birthday, regardless of whether or not they are working. Between age 65 and 70 your spouse has to have worked at least 40 hours in a period of 30 consecutive days in the relevant financial year to be able to receive your contributions. You can’t make spouse contributions for a spouse aged 70 or over.
A spouse includes a de facto partner of the same or opposite sex. Both you and your spouse must also be Australian residents at the time the contributions are made.
As the contributor, you can get a tax rebate up to $540 per financial year. You get the full tax rebate if:
- you contribute at least $3,000 to your spouse’s account; and
- their assessable income plus reportable fringe benefits plus reportable employer super contributions is less than $10,800 for the year.
If you contribute less than $3,000, the rebate will be equivalent to 18% of your contributions.
If your spouse’s relevant income is higher than $10,800, the rebate reduces until it cuts out when your spouse’s income reaches $13,800.
You can find more details about eligibility on the ATO website.
6. Minimum pension limits
Minimum pension limits apply to account-based, allocated and market linked (term allocated) pensions.
|Age||Minimum pension payment limit|
|95 and over||14%|
7. Preservation age
|Date of birth||Preservation age|
|Before 1 July 1960||55|
|1 July 1960 to 30 June 1961||56|
|1 July 1961 to 30 June 1962||57|
|1 July 1962 to 30 June 1963||58|
|1 July 1963 to 30 June 1964||59|
|1 July 1964 and after||60|
8. Income tax rates
Marginal personal income tax rates for 2016/17 financial year excluding the Medicare Levy.
|Taxable Income p.a.||Tax on income p.a.|
|$18,201 – $37,000||19c for each $1 over $18,200|
|$37,001 – $80,000||$3,572 plus 32.5c for each $1 over $37,000|
|$80,001 – $180,000||$17,547 plus 37c for each $1 over $80,000|
|$180,001 and over*||$54,547 plus 47c for each $1 over $180,000|
* 2% temporary levy for 2015/16 and 2016/17 for individuals with a taxable income of $180,000 per year.
9. Tax on super components
Taxed elements of your lump sum benefit
|Contribution type||Components||Tax treatment|
|Taxable||Under preservation age
Taxed at 22%*
At or above preservation age
Tax free up to $195,000 and the balance taxed at 17%*
Age 60 and over
* Includes Medicare Levy of 2%.
Tax on contributions
|Non-concessional||Under contribution limit||Over contribution limit|
|Concessional||15%||Your individual marginal tax rate plus an interest charge*|
|High income earners of over $300K#||30%|
* Includes Medicare Levy of 2% and temporary Budget Repair Levy of 2%.
# The additional 15% tax will only apply to the contributions equal to the value of calculated income over $300k.
Note: There is a special method to calculate a person’s income for this additional tax. For example your superannuation contributions are included in the calculation. Please refer to the ATO website for further details.
Tax on super earnings
Investment earnings in superannuation are taxed at a maximum rate of 15%. The effective tax rate on some earnings is lower because of further tax concessions or credits available to the Fund.
Investment earnings on pensions are tax free.
Tax on income streams
Super income streams are also known as pensions and annuities.
Superannuation benefits are made up of two components, taxable and tax-free. Please note, the tax free component is not included in the table below as no tax is payable on this component.
|Age of recipient||Tax on income stream taxable component|
|Age 60 or above||Tax free|
|At or above preservation age and under 60||Taxed at marginal tax rates
Tax offset of 15% is available
|Under preservation age||Taxed at marginal tax rates, with no tax offset. Tax offset of 15% is available if a disability super benefit|
For information regarding tax on death benefits please visit the ATO website
10. Maximum contribution base
The maximum super contribution base is used to determine the maximum limit on any individual employee’s earnings base for each quarter of any financial year. The proposed maximum contribution base for superannuation guarantee (SG) purposes is $51,620 per quarter for the 2016/17 financial year.
11. Useful links
Can’t find what you’re looking for? Try the following websites:
Current tax rates: www.ato.gov.au
Superannuation industry issues: http://www.superannuation.asn.au/
Social security entitlements: www.centrelink.gov.au
Financial tips and safety checks: www.moneysmart.com.au
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