How super is taxed guide Tax on contributions

Tax on contributions

The tax paid on super contributions depends on your age, the amount and type of contributions and whether you have provided ESSSuper with your TFN. There are caps on the amount of concessional (before-tax) contributions you and your employer can make to your super. If you exceed these caps, you may pay extra tax. Also, if we don’t have your TFN, all contributions will be taxed at 47%1 . The table below shows the tax that applies if we have your TFN.

Type of contribution Tax rate
Concessional (e.g. employer superannuation guarantee and salary sacrifice)
  • 15% on amounts up to $25,0002 a year
  • Where your combined income including concessional contributions exceeds $250,000 p.a., an additional 15% tax will apply to concessional contributions relating to the income exceeding $250,000
Non-concessional
  • 0% on amounts up to $100,0002, 3, 4 a year
  • 47%1,3 on amounts above $100,0002, 3, 4 a year

  1. Rates shown include the Medicare levy of 2%.
  2. Contribution caps are for the 2018/19 year and may change in the future.
  3. If you’re under age 65 at 1 July, you can depending on your balance bring forward two years and contribute up to $300,000 tax free for a three year period. Any contributions above the cap (or above $300,000 over three years if applicable) are taxed at 47%, including the Medicare Levy unless withdrawn.
  4. If you have a total super balance of $1.6 million or more at 30 June of the previous financial year, your non-concessional contributions cap is zero and any non-concessional contributions you make will be subject to excess non-concessional contributions tax and taxed at the highest marginal tax rate.

You may be able to elect to release up to 85% of your excess concessional contributions from the fund. Excess concessional contributions over the above caps will be taxed at your marginal rate (plus the excess concessional contributions charge). You should monitor all contributions (made by you and on your behalf ) into your account to ensure they don’t exceed the caps.

Contributions tax is deducted from your account as at 30 June each year and on closure of your account (after insurance premiums and administration fees have been deducted from your account).