With the new financial year well and truly underway, it’s important to understand what you can contribute to super, and how you can avoid breaching the contribution limits.
Here are five tips to consider:
- Know Your Contribution Limits: Understand the contribution limits set by the Australian Tax Office (ATO). For the 2023/24 financial year, the concessional (before-tax) contribution limit is $27,500, and the non-concessional (after-tax) contribution limit is $110,000;
- Monitor Contributions: Keep track of all contributions made to your super fund throughout the year. This includes both employer contributions and any personal contributions you make. Regularly review your super fund statements to ensure you’re not exceeding the limits;
- Coordinate with Your Employer: If you have a salaried job, your employer’s contributions (including both mandatory and any salary sacrifice contributions) count towards your concessional contributions limit. Coordinate with your employer to make sure your contributions align with the limit to avoid exceeding it;
- Use the Bring Forward Rule Wisely: The “bring forward” rule allows you to contribute up to three times the non-concessional contribution cap in a single year, using the next two years’ caps. However, be cautious when using this rule to avoid exceeding the caps in any of the three years. It’s important to understand how this rule works and plan your contributions accordingly;
- Regularly Review and Adjust: Life events such as receiving bonuses, inheritance, or selling assets can impact your ability to contribute to your super. Regularly review your financial situation and adjust your contributions accordingly to avoid surpassing the contribution limits.
When in doubt, look up your details on MyGov. MyGov can be a very valuable tool when looking to substantiate your key super details. However, it is important to understand where the data comes from and when it is updated. In some cases, the data won’t be up to date and other steps should be taken to ensure that contribution strategies are based on accurate and complete information. MyGov provides details about your:
- concessional contributions (CCs);
- catch-up CCs accrued;
- non-concessional contributions (NCCs) including bring-forward arrangements;
- employer contributions;
- total super balance (TSB); and
- transfer balance caps.
Given the complexities that can arise, working with your Goldsborough adviser can be a great way of making sure that mistakes (excess contributions) don’t happen.
