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Superannuation Planning for the 2015 Year


Current treatment of contributions into superannuation

An employer is eligible to claim a full tax deduction for all super contributions made on behalf of an employee (subject to contribution rules being satisfied). Individuals who are self employed are able to claim a full deduction for their superannuation contributions and as well are eligible for the Government co-contribution for their after-tax contributions.

From 1 July 2013, if contributions exceed the annual concessional contribution caps (see table below) the individual will be required to include the excess amount in their assessable income and be taxed at their marginal tax rate. However, they will be entitled to an offset equal to the 15% tax paid on the contribution by the superannuation fund.

Excess contributions will attract the Excess Concessional Contribution (ECC) charge to recognise that the tax is collected later than normal income tax. The ECC charge is payable on the increase in tax liability in the year the excess concessional contributions are made. The ECC charge is calculated from the start of the income year in which the excess contributions were made until the date that the tax is due to be paid under the tax assessment for the year that includes the excess concessional contributions. As an example the ECC charge rates for September 2013 and December 2013 quarters are 5.6% and 5.82% respectively.

Superannuation contributions are divided into two categories - concessional and non-concessional contributions:

• concessional contributions - includes employer contributions (including salary sacrificed contributions) and contributions by self-employed persons which are claimed as a tax deduction.

• non-concessional contributions - generally all contributions where a tax deduction is not claimed (i.e. contributions from after tax dollars,

co-contribution and spouse contributions).

The following tables set out the caps for concessional contributions.

General Cap

Income Year

Concessional Contributions Cap (p.a.)


$25 000


$30 000

Concessional contributions cap for ‘older Australians’

Income Year

Cap for those aged 59 years or over on

30 June 2013

Cap for those aged 49 years or over on

30 June 2014


$35 000

$25 000


$35 000

$35 000

The non-concessional cap is $180 000 for the 2015 income year for all individuals under the age of 75. Individuals that are aged 64 and under have the option of bringing forward the next two year’ contributions, which allows additional non-concessional contributions to be made, up to a maximum of $360 000 in the 2014-15 year. By way of illustration, this means you can make a non-concessional contribution of $540 000 in the 2014-15 year. Under this approach you will not be able to make a further non-concessional contribution until the beginning of the 2017-18 year.

Note that in addition to the above, where an entity is eligible to apply the Small Business 15 year exemption CGT Retirement concession, the entity will be eligible to rollover up to an additional $1 355 000 (CGT cap amount) into the superannuation fund of a ‘significant individual’ of the entity. The

$1 355 000 amount will not count toward either the concessional contribution cap or the non-concessional contribution cap.

Any excess non-concessional contributions will be taxed at 47% and the amount of tax paid in relation to the excess non-concessional contributions must be withdrawn from the super fund under the compulsory release authority issued by the ATO.

2015 Budget Announcement

The Federal Government announced in its 2015 Budget that it will allow individuals to withdraw excess amounts for the non-concessional contributions made from 1 July 2013 and any associated earnings, with these earnings to be taxed at the individual’s marginal tax rate. The Government will consult with key stakeholders in the superannuation industry before finalising the details of this policy.

Prepared 22 July 2014

This article is not a substitute for independent professional advice. We do not warrant the accuracy, completeness or adequacy of the information or material in this article. All information is subject to change without notice. We and each party providing material displayed in this article disclaim liability to all persons or organisations in relation to any action(s) taken on the basis of currency or accuracy of the information or material, or any loss or damage suffered in connection with that information or material. You should make your own enquiries before entering into any transaction on the basis of the information or material in this article. Please ensure you contact us to discuss your particular circumstances and how the information provided applies to your situation.

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