Are you paying excess contributions tax?

Emma Clayson
Nov 14, 2019
minute read

This information is of particular importance to high-earners who have more than one employer.

Many high earners are paying ‘excess contributions tax’ each year. The taxpayer is charged an additional 31.5% tax when they exceed the $25,000 per year cap on superannuation contributions from their employers.

From the 1st of Jan 2010, individuals that are eligible can apply to opt-out of receiving super guarantee from some of their employers in order to avoid unintentionally going above the concessional contributions cap. 

Eligible individuals

Eligible individuals must meet the following criteria:

  • have more than one employer; and
  • you expect your employers mandated concessional super contributions to go over your concessional contributions cap for the financial year. 

Apply to the ATO to opt-out

Individuals may be eligible to opt out if they have more than one employer and expect that their concessional super contributions will exceed the contributions cap for the financial year.

A separate application is required for each financial year.

For more information, please take a look at the ATO’s website or chat to us, we're always happy to help.

**Important note - there may be very good reasons for the additional contributions being made into your fund. Before taking action, it’s always best to speak to a financial advisor who can provide guidance on this.

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Emma Clayson
Emma has worked in the accounting profession for over 12 years, is a Certified Practising Accountant and has also attained an MBA. Emma works to assist the trustees of Self-Managed Super Funds to fulfil their compliance obligations, she is Xero Certified and is experienced with MYOB and Reckon.

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