What are the concessional and non-concessional superannuation contribution limits?
When you make payments to your superannuation, there are two types of contributions you can make. These are concessional, and non-concessional contributions.
Concessional contributions are contributions you make to your superannuation that are either pre-tax, or receive a tax refund. This is because superannuation gets taxed at 15%, whereas many Pearler investors are taxed at the 30% tax bracket (or higher!). Importantly, concessional contributions have a cap of $30,000, which includes your Super Guarantee (SG) which is usually paid by your employer. Concessional contributions also include personal contributions up to the annual limit.
Non-concessional contributions are contributions you make to your superannuation that are post-tax. This is separate from the $30,000 concessional contribution limit. For the 2024-25 Financial Year there is a non-concessional contribution cap of $120,000 (Always check the ATO for the most up to date information regarding contribution caps). Non-concessional contributions include personal contributions you have not claimed as a tax deduction, spousal contributions, and excess concessional contributions not released from your super fund.
The non-concessional contribution limit can include bring-forward-caps where you can bring forward the equivalent of 1 or 2 years of your annual cap from future years. This means you can make contributions up to 2 or 3 times the annual cap amount in the first year of the bring-forward period. Any amount of the bring-forward cap that's unused in the first year can be used in the remaining 1 or 2 years.
For example:
If you receive $10,000 from your employer as Super Guarantee (SG) and make an additional $25,000 personal concessional contribution, your total concessional contributions will be $35,000—which exceeds the $30,000 concessional cap for the 2024–25 financial year.
The first $30,000 will be taxed at 15% inside your super.
The excess $5,000 will generally be:
Added to your taxable income, and
Taxed at your marginal tax rate, unless you choose to withdraw the excess and associated earnings, which the ATO allows under the excess contributions rules.
Or…
If you receive $30,000 in employer Super Guarantee (SG) contributions and also make a $125,000 personal contribution to your super:
The $30,000 SG is treated as a concessional contribution and taxed at 15%.
The $125,000 is treated as a non-concessional (after-tax) contribution, which is not taxed on entry, but only $120,000 is allowed under the 2023–24 non-concessional cap.
The excess $5,000 would normally be in breach of the cap—unless you have unused bring-forward capacity from previous years (e.g., you contributed less than $120,000 in 2023–24), in which case it may be accepted without penalty.
If you exceed your non-concessional cap without bring-forward room, the excess may be taxed at your marginal rate, or you may be asked to withdraw it.
It’s also worth noting if your income and concessional super contributions total more than $250,000, you should check if you have to pay Division 293 tax.
For more information on concessional contributions, click here. For more information on non-concessional contributions, click here. For further information on what contributions are concessional and non-concessional, click here.
For anything income and tax related, it’s best to speak to a professional tax accountant or financial advisor before making any decisions.
As always, before making financial decisions, please do your own research and read the Pearler Super product disclosure statement along with the TMD and other important documents listed here.
If you have more questions or would like to share any feedback, please reach out to us via our live chat or email us at help@pearler.com.