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Excess Superannuation Concessional Contributions

If, during the 2014 financial year, you made concessional contributions to your superannuation fund in excess of your concessional contributions cap you will receive an amended taxation assessment from the ATO. These excess contributions are subject to tax.

The tax charge is calculated as follows:

  • Assessable Income increased by the Excess Contribution and taxed at marginal tax rates plus the Medicare levy.
  • Less 15% rebate granted on the Excess Contributions (this represents 15% tax paid by the fund on such contributions).
  • Add notional interest penalty calculated by Australian Taxation Office (interest on the additional tax to be paid).
  • Add excess concessional contributions charge calculated by Australian Taxation Office (notional interest earned on the excess concessional contributions).

Options Available

The amount calculated using the above methodology is payable using one of the options provided on the amended assessment.

However, to help fund this additional liability you can apply to have up to 85% of the excess amount released from your superannuation fund. Forms to do this will be supplied with the amended assessment. These forms need to be completed and returned to the ATO within the time-frame specified on the forms. This time-frame can be tight so act quickly.

By providing your authorisation, the fund, at the ATO’s request, will deposit the amount withdrawn with the ATO to meet the outstanding tax charge, with any excess being subsequently repaid directly to you.

If you have received an amended assessment and have any questions or think you may have exceeded your cap but have not received an amended assessment at this stage please do not hesitate to contact us.