Superannuation Rates & Threshholds

Superannuation Rates Thresholds

We have compiled a list of important rates and thresholds for Australian superannuation (for the 2017/18 financial year).

Concessional contributions cap-

Concessional contributions include employer contributions (including contributions under a salary sacrifice arrangement) and personal contributions claimed as a tax deduction by a self-employed person (or by any person from 1 July 2017).

Income Year Amount of cap
2017/18 $25 000
2016/17 $30 000

Editor: Note that, from the 2013/14 year, excess concessional contributions are included in the individual’s assessable income and taxed at their marginal rates. They are also liable for an ‘excess concessional contribution charge’, calculated at the shortfall interest charge (SIC) rate, on the additional tax liability that arises from having access concessional contributions.]

Also, from 1 July 2018, taxpayers with a total superannuation balance of less than $500,000 on 30 June of the previous financial year may be entitled to carry forward unused amounts of their concessional contributions cap. The first year this may be done will be the 2019/20 income year. Unused amounts will be available for a maximum of five years, and after this period will expire.

Temporary concessional cap-

Income Year Age of taxpayer Amount of cap
2017/18 All ages $25,000
2016/17 49 years or over on 30 June 16 $35,000*

(*) From 1 July 2017, there will be no temporary concessional cap for taxpayers aged 50 and over, meaning the concessional contributions cap of $25,000 will apply to all taxpayers from 1 July 2017.

Non-concessional cap-

Non-concessional contributions include personal contributions for which taxpayers do not claim an income tax deduction.

Income Year Amount of cap
2017/18 $100,000
2016/17 $180,000

Editor: The non-concessional cap under the 3-year bring-forward rule is generally 3 times the above annual cap. However, transitional rules apply for those that triggered the bring-forward in the 2016 or 2017 income years but who have not fully utilised their bring-forward cap before 1 July 2017. Their cap will be reassessed on 1 July 2017 to reflect the new annual cap, as follows:

  • If the member triggered their bring-forward cap in the 2015/16 year, the maximum amount that can contributed in total for the 2015/16, 2016/17 and 2017/18 years is $460,000; and
  • If the member triggered their bring-forward cap in the 2016/17 year, the maximum amount that can contributed in total for the 2016/17, 2017/18 and 2018/19 years is $380,000.

Also, conditions apply to be able to make non-concessional contributions from 1 July 2017, including having a total superannuation balance of less than $1.6 million on 30 June of the year before the year the contributions are being made (and further limits may also apply).

CGT Cap Amount-

Taxpayers can exclude non-concessional super contributions that arise from the small business 15-year exemption or the retirement exemption from the non-concessional contributions cap up to the CGT cap amount.

Income Year Amount of CGT cap
2017/18 $1,445,000
2016/17 $1,415,000

Editor: Note that the “untaxed plan cap amount” is the same as the CGT cap amount. The untaxed plan cap amount limits the concessional tax treatment of benefits (paid out in the form of a lump sum) that have not been subject to contributions tax in a super fund.

Low rate cap amount-

The application of the low rate threshold for super lump sum payments is capped. The low rate cap amount is reduced by any amount previously applied to the low rate threshold.

Income Year Amount of cap
2017/18 $200,000
2016/17 $195,000

 

Tax table for lump sum benefits paid during a member’s lifetime-

Component of lump sum benefit paid to member Age when payment is received Amount subject to tax Maximum tax rate (excl. Medicare levy)
 

 

 

 

 

 

Taxable component – taxed element

Under preservation age* Whole Amount 20%
 

At or above preservation age* and under 60 years

Up to the low rate cap amount Nil
Above the low rate rap amount 15%
 

 

 

 

 

Aged 60 years or more

 

 

 

 

Nil- amount is non-assessable, non-exempt income

 

 

 

 

 

N/A

 

 

 

 

 

 

 

Taxable component – untaxed element

 

Under preservation age*

Up to untaxed plan cap amount 30%
Above untaxed plan cap amount 45%
 

 

At or above preservation age* and under 60 years

Up to the low rate cap amount 15%
Above the low rate cap amount and up to the untaxed plan cap amount 30%
Above the untaxed plan cap amount 45%
 

 

Aged 60 years or more

Up to untaxed plan cap amount 15%
Above the untaxed plan cap amount 45%

(*) A member’s preservation age is generally age 55 (for members born 1 July 1960), but it has increased to 56 for members born between 1 July 1960 and 30 June 1961 and will increase to 57 for members born between 1 July 1961 and 30 June 1962 (and will eventually increase to 60 for members born after 30 June 1964).

An additional temporary 2% lev applies for the 2014/15, 2015/16 and 2016/17 income years to individuals with a taxable income of more than $180,000 per year (at a rate of 2% of each dollar of a taxpayer’s taxable income over $180,000). This will cease to apply from 1 July 2017.

The Medicare levy rate (if applicable) is 2% for the 2014/15 income year and later income years and is applied in addition to the maximum rate of tax for each income component.

Minimum annual payments for super streams-

Once taxpayers start a pension or annuity on a after 1 July 2007, a minimum amount is required to be paid each year.

There is no maximum amount other than the balance of their super account, unless it is a transition to retirement pension, in which case the maximum amount year is 10% of the account balance.

The following table shows the minimum percentage factor (indicative only) for each age group.

Minimum annual percentage factors for income streams-

Age 2013/14 and later income years
Under 65 4%
65-74 5%
75-79 6%
80-84 7%
85-89 9%
90-94 11%
95 or more 14%

Tax tables for a super income stream paid during a member’s lifetime 

Element taxed in the fund of a super income stream-

The table below summarises the taxation of a super income stream paid with an element taxed in the fund. The tax-free component is not included (this component is non-assessable non-exempt income in all cases).

Age of recipient Tax treatment
Age 60 years or more Non-assessable, non-exempt income
At or above preservation aged and under 60 years 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

Note: A temporary 2% levy applies for the 2014/15, 2015/16, and 2016/17 income years to individuals with a taxable income of more than $180,000 per year (payable at a rate of 2% of each dollar of a taxpayer’s taxable income over $180,000). This will cease to apply from 1 July 2017.

The Medicare levy rate its 2% from 1 July 2014 for the 2014/15 income year and later income years and is applied in addition to the maximum rate of tax for each income component.

Element untaxed in the fund of a super income stream-

The table below summarises the taxation of a super member income stream paid with an element untaxed in the fund. The tax-free component is not included (this component is non-assessable non-exempt income in all cases).

Age of recipient Tax treatment
Aged 60 years or more Taxed at marginal rates, with a 10% tax offset
At or above preservation age and under 60 years Taxed at marginal rates, with no tax offset
Under preservation age Taxed at marginal rate, with no tax offset

Note: A temporary 2% levy applies for the 2014/15, 2015/16 and 2016/17 income years to individuals with a taxable income of more than $180,000 per year. The levy is payable at a rate of 2% of each dollar of a taxpayer’s taxable income over $180,000. This will cease to apply from 1 July 2017.

Division 293 tax threshold-

From 1 July 2012, Division 293 tax applies to certain super contributions (i.e, basically, concessional contributions) to reduce the concessional tax treatment of those contributions made by, or for, very high income individuals.

An individual’s income (for Medicare levy surcharge purposes) is added to certain super contributions and compared to the high-income threshold. The high-income threshold is $300,000 until the 2016/17 income year, and $250,000 from the 2017/18 income year.

Division 293 tax is payable (at a rate of 15%) on the excess over the threshold, or on the super contributions, whichever is less (although Division 293 tax is not payable on excess concessional contributions).

Low income superannuation tax offset-

From 1 July 2017, taxpayers that earn an adjusted taxable income up to $37,000 may be eligible to receive a refund into their superannuation account of the tax paid on their eligible concessional superannuation contributions, up to a cap of $500. This low-income superannuation tax offset (LISTO) is replacing the low-income superannuation contribution (LISC) (which may be available until 30 June 2017), and does not need to be applied for (the ATO will calculate eligibility automatically).

Super guarantee rate-

The superannuation guarantee rate is 9.5% from 1 Jul 2014, up from 9.25% in 2013/14 (except on Norfolk Island, where it is 1% in the 2016/17 year, and 2% in the 2017/18 year).

The superannuation guarantee rate will remain at 9.5% until 1 July 2021 when it will increase to 10%. It will then increase in 0.5% increments until it reaches 12% from 1 July 2025.

Superannuation guarantee – maximum contribution base-

Income Year Maximum contribution base per quarter
2017/18 $52,760
2016/17 $51,620

 

 

 

 

 

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