Contribution limits
The amount of Superannuation Guarantee, salary sacrifice and other concessional contributions which individuals can make to superannuation each year at the low tax rate of 15% is now limited to $25,000.
For those members aged 50 to 74, a transitional limit of $50,000 per annum will be in place until 30 June 2012. The new limits are set at half of the previous limits, and took effect on 1 July 2009.
Amounts which exceed an individual's limit will be taxed at the highest marginal tax rate plus Medicare levy - which is an extra 31.5%. Excess amounts will also count towards an individual's non-concessional contribution limit which is for super contributions made using after-tax money.
This limit is $150,000 per annum, or $450,000 over three years if under age 65. All contribution limits apply per individual across all superannuation funds.
What should I consider?
If you salary sacrifice a large amount of before-tax income into super each year, or into another fund, it may pay to check your 2008/09 statement to see if your total concessional contributions would, if continued this year, exceed your new limit.
If you don't salary sacrifice, but are planning to top-up your super savings just before retirement, consider starting sooner, if possible. For instance, many members salary sacrifice a small amount into super each pay period which steadily builds their savings, is tax effective, and falls well under their new contribution limit. For details on salary sacrificing, visit VicSuper's website.