Superannuation is one of the most tax-effective vehicles for retirement savings, but it's far from simple.
Here we summarise the confusing range of tax rates and thresholds that can affect the amount of tax you pay on your super savings in the accumulation phase (when you're working) and retirement phase (when you take money out).
Type of Receipt |
Rate % |
Earnings (except non-arm's length income and exempt pension income)
|
15 10 |
Employer Contributions2,3 – All employer contributions (except any portion covered by S.295-180 choice4) |
15 |
Personal Contributions2
|
15 0 |
Other Contributions
|
0 0 0 15 |
Roll-overs originating from taxable source (e.g., another complying fund)
|
0 15 |
Non-arm's Length Income (less attributable deductions) – S.295-550 |
45 |
____________________________________________________________________________________________________
Concessional contributions include employer contributions (including contributions made under a salary sacrifice arrangement) and personal contributions claimed as a tax deduction.
Income Year |
Cap Amount1,2 |
2021/22 |
$27,500 |
NCCs include personal contributions for which taxpayers do not claim a tax deduction1.
Income Year |
Cap Amount |
2021/22 |
$110,0001,2 |
An individual's NCCs cap may be higher under the 'bring-forward rule', broadly if:
The period over which the ‘bring-forward rule’ applies varies, broadly depending on the member’s Total Superannuation Balance (‘TSB’) on 30 June of the income year before the year in which the rule is triggered.
The table below sets out the NCCs cap where the bring-forward rule is triggered in 2021/22 :
Total Superannuation Balance on 30 June 2021 |
NCCs Cap for the Bring-forward Period2 |
Bring-forward Period |
Less than $1.48 million |
$330,000 |
3 years |
$1.48 million to less than $1.59 million |
$220,000 |
2 years |
$1.59 million to less than $1.7 million |
$110,000 |
N/A (i.e., general NCCs cap applies) |
$1.7 million or more |
$0 |
N/A |
An individual may elect for certain contributions made in connection with applying the CGT small business 15-year or retirement exemptions to count towards their lifetime CGT cap, rather than their non-concessional contributions cap.
Income Year |
Amount of Cap |
2021/22 |
$1.615 million |
If an individual is a low or middle-income earner (and satisfies other eligibility requirements), and makes personal (non-concessional) contributions, the Government will make a co-contribution of $0.50 for every $1 contributed, up to a maximum amount. The co-contribution income thresholds and maximum amount for 2021/22 are as follows:
Total Income1 |
Maximum Co-contribution2 |
$0 – $41,112 |
$500 |
$41,113 – $56,111 |
$500 – [3.333% x (Total Income – $41,112] |
$56,112 + |
Nil |
The general transfer balance cap is used for various purposes, including to determine:
Income Year |
General Transfer Balance Cap1 |
2021/22 |
$1.7 million |
1 Increased from $1.6 million from 1 July 2021 as a result of indexation.
The application of the low rate threshold for superannuation lump sum payments is capped. The low rate cap amount is reduced by any amount previously applied to the low rate threshold.
Income Year |
Cap Amount1 |
2021/22 |
$225,000 |
1 From 1 July 2022, the low rate cap amount will be $230,000 as a result of indexation.
Employers who provide less than a prescribed level of superannuation support (the 'charge percentage') for their eligible employees, will be liable to pay a superannuation guarantee charge based on the shortfall.
Income Year |
Charge Percentage1 |
2021/22 |
10% |
1 From 1 July 2022, the charge percentage will be 10.5%.
Income Year |
Maximum Employee Earnings (per quarter)1,2 |
2021/22 |
$58,920 |
Please get in touch with our North Coast Accounting team and schedule a meeting to review the changes coming into effect as of 1 July 2022.
Get in touch with us
Book a free, no-obligation consultation to experience our solutions which will exceed your expectations.