Contribution caps

01 July 2020

Taxation - BUSSQ Super

Making contributions to super

When making contributions to superannuation you should keep in mind the types of contributions that can be made and their applicable limits.

Contribution limits, or ‘caps’ as they are known, have been a part of super for many years. Penalties may apply if you exceed these caps. The caps relate to you as an individual, so you need to keep track of the contributions you and/or your employer make to super across all your super funds. At BUSSQ, we can see what contributions have been made to your BUSSQ account, but we cannot access the details on any other contributions you or another employer may make to another fund. Ultimately, keeping within your contribution limits is your responsibility.

To help ensure you keep under the caps, here is an overview of some of the key contributions rules:

Concessional contributions cap

Concessional contributions are those made for you by your employer or by you if you salary sacrifice some of your pay into super, or contributions you claim as a tax deduction (known as personal deductible contributions). The concessional contribution cap is currently $27,500.

You can carry forward any unused concessional contributions cap amounts for up to five consecutive years providing your total super balances are less than $500,000 (see Carry Forward Unused Concessional Contributions).

If you exceed the cap the excess concessional contributions will be taxed at your marginal tax rate, less 15% which was the tax you’d already paid when you first made contributions to the Fund. In addition, you will also be charged interest, which is determined by the ATO, for exceeding the cap. 

Non concessional contributions cap

Non concessional contributions are also known as voluntary or after-tax contributions. This cap is separate to the above concessional contributions cap. The limit under this cap is currently $110,000. 

If you have a total super balance of $1.7 million or more across all your super accounts, you are unable to make non-concessional contributions. If you do, you will exceed your cap. If your balance is close to $1.7 million, you will only be eligible to make non-concessional contributions up to the $1.7 million limit.

If you happen to go over your non-concessional cap, the ATO will provide you in writing of the two options available to you. The first option is to have the excess contributions and 85% of the associated earnings released to you. The ATO will add the full amount of associated earnings to your assessable income, give you a 15% tax offset, and issue you with an amended notice of assessment.

The second option is to leave the excess contributions and associated earnings in your super account. The ATO will send you a notice of assessment taxing you on your entire excess non-concessional contributions at the top marginal tax rate (currently 47%). This tax must be paid from your super fund, using the release authority provided by the ATO.

Bring forward non-concessional (after tax) contributions

The current non-concessional contributions cap is $110,000 per year. However, the bring-forward rule allows eligible super fund members to make up to $330,000 of non-concessional (after-tax) contributions in a single year. This means that, over the three years they will not exceed the cap. To be eligible to use the bring forward rule, you must be under the age of 67 and your superannuation account balance must be under the $1.7 million cap. From 1 July 2022 this age limit increases and those under 74 will be eligible. 

For example, Dave who is 61 years old and has a $400,000 superannuation balance, inherits $260,000 and he decides to put that money into super rather than the bank. Dave takes advantage of the ‘bring forward’ rule and tops up his super account with the $260,000 in a single year. Because Dave hasn’t gone over the $330,000 he can still make further non-concessional deposits, up to $70,000, into his super over the next two financial years.

Carry forward unused concessional contributions

From 1 July 2018, you can carry forward unused concessional contributions cap amounts. The first year in which you can increase your concessional contributions cap by the amount of unused cap is 2019–20, but only if you have a total superannuation balance of less than $500,000 at the end of 30 June in the previous year. Unused amounts are available for a maximum of five years and will expire after this.

Let’s take a look at how Sam carried forward unused concessional contributions:

During 2018–19 to 2021–22, Sam has minimal super contributions as he is working part-time while completing studies. His super balance is continuing to grow with earnings and a small amount of super contributions but in 2020–21 his account balance reduced due to negative returns in that year. Sam has unused cap amounts for each of the 2018–19 to 2021–22 financial years.


Caps 2017-18 2018-19 2019-20 2020-21 2021-22
General contributions cap $25,000 $25,000 $25,000 $25,000 $25,000
Cumulative available unused cap n/a Nil $22,000 Nil $69,000
Maximum cap available $25,000 $25,000 $47,000 $25,000 $94,000
Super balance 30 June previous year n/a $480,000 $490,000 $505,000 $490,000
Concessional contributions Nil $3,000 $3,000 Nil Nil
Available unused cap for relevant financial year to be carried forward Nil $22,000 $22,000 $25,000 $25,000

Note: This table assumes no indexing of general cap.

Sam would be entitled to use the unused concessional cap amounts in 2018–19 and 2021–22 as his total super balance at the end of 30 June in the year immediately preceding was less than $500,000.

Sam would not be able to use his unused concessional cap contributions in 2020–21 as his total super balance at the end of 30 June of the previous year was $505,000.

In 2021–22 Sam returns to work. For that year he has a maximum concessional cap amount available of $94,000 ($69,000 plus $25,000) for 2021–22 and is eligible to contribute this amount as this total super balance at the end of 30 June 2021 was now less than $500,000.

The Work Test

If you are under age 67 there is no requirement to be working before you can contribute to super. If you are between 67 and 74, you must meet the work test or the work test exemption before contributions can be made.

From 1 July the work test will be removed and those aged under 74 will be able to make and receive salary sacrifice and personal non-concessional contributions. If you are aged 67-74 you will still need to meet the work test or work test exemption to claim a tax deduction for a personal non-concessional contribution.

To meet the work test you must be gainfully employed for at least 40 hours over 30 consecutive days during the financial year.

The work test exemption applies if you were gainfully employed for at least 40 hours over 30 consecutive days in the previous financial year and had a total superannuation balance of less than $300,000 on 30 June that year.  You cannot however claim the work test exemption if you have claimed it in a previous financial year.


Making contributions to super can be complex and if you’d like advice on the contribution limits call us on 1800 692 877. As a BUSSQ member you have access to personal financial advice on contributions at no extra cost*.


*Personal advice is limited to BUSSQ products and is advice on insurance, investment choice, contributions and retirement. The cost of this advice is included in the BUSSQ Trustee related costs and this advice is provided by Link Advice Pty Ltd (ABN 36 105 811 836 AFSL 258145). This article provides general information only and does not take into account your personal financial situation or needs. Before acting, you should consider the appropriateness of the information to your needs or obtain financial advice tailored for your personal circumstances. Prepared by BUSS (Queensland) Pty Ltd (ABN 15 065 081 281, AFSL 237860) as Trustee for BUSSQ (BUSSQ Fund, ABN 85 571 332 201). 

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