What are they and why do they matter?
What are superannuation contribution caps?
Super caps are the limits to annual super contributions. There are two types of cap:
- a maximum before-tax contribution limit, and
- a limit on after-tax contributions.
Before-tax contributions include employer contributions (the Super Guarantee or SG) and salary sacrifice.
What are the super contribution caps for 2023-24?
The current caps are:
- Before-tax super cap: $27,500 (including employer contributions) – but could be more where members use the ‘carry forward’ rule.
- After-tax super cap: $110,000 – but could be more where members use the ‘bring forward’ rule.
The ATO has more information on contribution caps.
Is it the same as the maximum super contribution base?
No, they’re different things.
Under the SG, compulsory superannuation is set at a percentage of each employee’s regular income – usually at least 11% of an employees’ ordinary time earnings from 1 July 2023. The minimum SG rate is gradually increasing to 12% by 1 July 2025. To prevent businesses from having to make large super contributions for those employees on very high incomes, there is a maximum recognised income to be used when calculating super.
In 2023-24, once an employee’s income reaches $249,080 per year, then the super is calculated based on that maximum, it does not keep rising. That means that the most a business would normally be expected to contribute in super for a single employee is $27,398.80 in 2023-24.
What if contributions exceed the cap?
Employees can withdraw excess contributions to super, although they have to pay income tax on any earnings from the excess contributions.
Getting super calculations right isn’t always straightforward, but our business specialists can help make it a bit easier. So if you have any queries, call us on 1800 222 071 between 8am and 8pm (AEST/AEDT) weekdays or get in touch with the Account Manager for your state.
Who is TWUSUPER?
TWUSUPER is the Industry Super Fund for people in transport and logistics - the people who keep Australia moving. We exist only to benefit our members, and have been helping employers manage employee super since 1984. We currently manage over $6 billion.
General advice on this website has been prepared without taking into account your objectives, financial situation or needs. Before acting on the advice, consider its appropriateness. Refer to our Product Disclosure Statement (PDS). The PDS is relevant when deciding whether to acquire or hold a product. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at twusuper.com.au/tmd