Concessional Contributions is the term applied to taxable superannuation payments that are contributed into someone’s superfund and which are taxed, at 15%, by that superfund. The use of the term “concessional” indicates that superannuation payments are tax deductible to the payer of those contributions. They cover superannuation payments in the following guises:

 

  • The standard 9.5% superannuation guarantee (SG) payments that employers must pay employees when monthly wages exceed $450
  • any additional concessional contributions your employer makes (which can be on various types of leave or final payments)
  • Salary sacrificed amounts that an employer must pay through agreement with the employee.

 

If you’re a sole trader or in a partnership, there is no law that makes SG payments for yourself mandatory. However, such a taxpayer may want to make personal concessional contributions to super as a way of saving for retirement.

 

There is a cap on the total concessional contributions can be paid from all such sources in any one year. The table below summarises that history of these caps during the last handful of years.

 

Year Age Concessional Contributions Cap
21-22 All ages $25,000
20-21 All ages $25,000
19-20 All ages $25,000
18-19 All ages $25,000
17-18 All ages $25,000
16-17 <49 $30,000
16-17 49+ $35,000

 

Traditionally, exceeding the cap would result in punitive taxes being imposed