If you have a super balance below $500,000 as at June 30, 2023, you are eligible to consider utilising unused concessional contribution caps for the past 5 financial years. This means, for the 2018-19 financial year, it is your last opportunity to utilise these contributions.
Heres what you need to know:
Unused concessional contribution amounts from 2018-19 will expire on July 1, 2024. If your total super balance was under $500,000 as of June 30, 2023, you can still access these unused caps in the current year (2023-24).
This allows you to potentially make larger concessional contributions and benefit from tax savings. Please note, you require to maximise your current financial year (2023-24) cap of $27,500 before utilising the benefits of unused carry forward contributions.
For example:
Imagine you had $3,000 unused from your 2018-19 concessional cap, and your super balance was under $500,000 on June 30, 2023. In the 2023-24 year, you could contribute the standard $27,500 + your unused $3,000, for a total of $30,500 in concessional contributions.
What are concessional contributions?
Concessional contributions are taxed at a much lower rate (15%*) than your regular income tax. They include:
- Employer contributions (Super Guarantee)
- Salary sacrifice arrangements (redirecting pre-tax salary to super)
- Personal contributions you claim a tax deduction for
* If you are a division 293 tax payer, there is an additional tax of 15% on concessional super contributions if you earn over $250,000 in 2023/24.
Benefits of Catch-up Contributions:
- Supercharge your retirement savings: Grow your super faster thanks to compounding interest.
- Reduce your current tax liability: Benefit from the lower tax rate on concessional contributions.
- Catch up for missed opportunities: Make up for years when you couldn’t contribute as much as you’d like.
How I can help:
- Understand your unused cap amounts
- Develop a strategy to maximise catch-up contributions
- Navigate the tax implications
- Assess potential risks associated with increasing contributions
This is general advice only. Let’s chat about your super situation and see if maximising catch-up contributions can benefit you before the deadline.
Book a free 15-min Discovery Meeting here.
