Contribution Caps Explained: Concessional vs Non-Concessional
Super contributions are split into two categories for tax purposes, each with its own annual cap. Going over either cap has real tax consequences, so it's worth understanding the difference before you add extra money in.
Concessional (before-tax) contributions
This category includes your employer's compulsory Super Guarantee contributions, any salary sacrifice amounts, and personal contributions you claim a tax deduction for. These are taxed at 15% inside super (higher for very high income earners under Division 293) rather than your marginal income tax rate. There's an annual concessional cap — a specific dollar figure set by legislation and indexed periodically — that includes all of these contributions added together, not just what you personally contribute.
Non-concessional (after-tax) contributions
These are contributions made from money you've already paid income tax on, and don't get a tax deduction. Because tax has already been paid, they're not taxed again going into super. The non-concessional cap is set at a multiple of the concessional cap and is also indexed periodically.
Carry-forward (catch-up) concessional contributions
If your total super balance is below a set threshold, you may be able to use unused concessional cap amounts from the previous five financial years, allowing a larger one-off contribution in a year you have extra capacity — useful for people who've had career breaks, as discussed in Average Super Balance by Age, or who receive a windfall like a bonus or inheritance.
The bring-forward rule for non-concessional contributions
Depending on your total super balance and age, you may be able to bring forward up to two future years' worth of non-concessional cap in a single year, allowing a larger lump-sum contribution — relevant, for example, if you've sold an asset and want to add proceeds to super in one go.
What happens if you exceed a cap
Exceeding the concessional cap generally means the excess is included in your assessable income (taxed at your marginal rate) and an additional charge applies, though you can choose to withdraw the excess from super rather than leave it there. Exceeding the non-concessional cap can trigger a higher tax rate on the excess and, in some cases, a requirement to withdraw the excess amount plus associated earnings. The ATO generally notifies you if you've exceeded a cap, based on contributions reported by your fund.
Frequently asked questions
Do employer SG contributions count toward the concessional cap?
Yes — all concessional contributions (SG, salary sacrifice, and deductible personal contributions) are added together against the one cap.
Can I choose whether a contribution is concessional or non-concessional?
For personal contributions, yes — you decide whether to claim a tax deduction (making it concessional) or not (making it non-concessional), by notifying your fund.
Is there an age limit on making contributions?
Rules around contributions after a certain age (including a work test in some cases) apply — see Contribution Caps After 60 for how this changes later in life.
Contribution caps are indexed periodically and can change — confirm current concessional and non-concessional cap amounts on ato.gov.au before publishing. This article contains general advice only. It has been prepared without taking into account your personal objectives, financial situation or needs, and does not constitute a recommendation to acquire, hold, or dispose of any financial product. Before acting on this information, consider its appropriateness to your own circumstances, and seek independent financial, tax and/or legal advice, or speak with a licensed financial adviser, before making any decision.
