Superannuation Fund Rates of Tax – 2018/19

Complying Superannuation Fund

 

Type of Receipt

Rate of Tax

%

Earnings (other than non-arm's length income and exempt pension income – refer Subdivision S.295-H and 295-F)

Income received including realised capital gains

Discount capital gains (asset held for 12 months or more)1

 

 

15

10

Employer Contributions2,3

Portion covered by S.295-180 choice4SGC shortfall component

All other employer contributions (no S.295-180 choice)

 

0

15

15

Personal Contributions

Portion covered by S.290-170 notice (of intention to claim a deduction)3All other personal contributions (no S.290-170 notice)

 

15

0

Contributions – other person (excluding trustee of exempt life assurance fund or of complying superannuation fund, ADF or PST)

Portion covered by S.295-180 choice4

Spouse contributions (where the contributor cannot deduct the contribution) (S.295-165)

Contributions for minor (not by an employer) (S.295-170) Government Co-contributions (S.295-170)

Generally, all other contributions (no S.295-180 choice)

 

 

0

0

 

0

0

15

Roll-overs5

Originating from taxable source (e.g., another complying fund)

  • tax-free component
  • taxable component (taxed element)
  • taxable component (untaxed element)5

 

 

0

0

15

Non-arm's Length Component

Non-arm's length income (less attributable deductions) – S.295-550

 

45

Transfer from Foreign Superannuation Funds

– amount specified in a choice under S.305-80

 

15

Transfer from Superannuation Holding Accounts ('SHA') special account6

All

 

15

Change of Status

Foreign fund to complying fund

– market value of assets less member contributions (S.295-330)

 

 

15

  • Effective tax rate when the 15% complying superannuation fund rate is applied to two-thirds of a discount capital gain.
  • Where a superannuation contribution has been made in respect of an individual who has not provided their TFN to the superannuation fund by the end of the income year, then these contributions will generally be subject to additional tax of 32% (calculated as 47% less the ordinary rate of tax paid by the fund (i.e., 15%)). However, a tax offset is generally available if the TFN is provided to the fund in any of the three income years after the year of contribution.
  • Subject to certain exceptions, the tax rate on concessional contributions made by, or on behalf of an individual whose ‘income’ as defined plus ‘low tax contributions’ exceeds $250,000 increases from 15% to 30%. The additional 15% (known as Division 293 tax) is assessed to the individual, who has the option of having the fund pay. If an individual’s ‘income’ (excluding their concessional contributions) is less than $250,000 but the inclusion of the contributions pushes them over this threshold, then the 30% rate will only apply to the amount of the contributions that are in excess of $250,000.
  • The choice applies to contributions made to a public sector superannuation scheme (other than one that came into existence after 5 September 2006) and the contributor must consent to the choice.

 

  • The rollover benefit will be taxed in the receiving fund to the extent it is not an 'excess untaxed rollover amount'. If the rollover amount exceeds the untaxed plan cap amount, the excess is taxed to the member (and not the fund) at 47% for the 2019 income year, with the tax withheld by the fund that makes the rollover payment.
  • The 'superannuation holding accounts (SHA) special account' (previously known as the superannuation holding accounts reserve) was closed to employer deposits after 30 June 2006.

 

 

Non-complying Superannuation Fund

 

Type of Receipt

Rate of Tax

%

Earnings

Income received including realised capital gains

Discount capital gains (asset held for 12 months or more)1

 

45

22.5

Contributions (Australian fund)2

Personal (S.295-190)

Employer (excluding trustee of exempt life assurance fund, complying superannuation fund, complying ADF or PST) (S.295-160, Item 1)

 

0

 

45

Contributions (Foreign fund)

Personal

Employer2and other persons

  • for temporary resident (S.295-185)
  • relates to a period as resident (S.295-160, Item 2(a))
  • for foreign resident (S.295-160, Item 2(b))
    • for period deriving assessable salary or wages3
    • for period not deriving assessable salary or wages

 

0

 

0

45

 

45

0

Transfer (Australian fund)

From foreign fund

only amount exceeding member's vested benefit (S.295-200)

 

 

45

Change of Status

Complying to non-complying

  • market value of assets less undeducted contributions and the contributions segment (S.295-320, Item 2 and S.295-325)

Foreign fund to Australian fund

  • market value of assets less member contributions (S.295-330)

 

 

 

45

 

45

  • A non-complying fund is entitled to a 50% discount as a trust. Refer to S.115-100 (a)(ii). The effective tax rate when the 45% superannuation fund rate is applied to one-half of the discount capital gain is 22.5%.
  • Where a superannuation contribution has been made in respect of an individual who has not provided their TFN to the superannuation fund by the end of the year, then these contributions will be subject to additional tax of 2%. However, a tax offset is generally available if the TFN is provided to the fund in any of the three years after the year of contribution.
  • Includes payments made to employees, company directors and office holders. Refer to S.295-160, Item 2(b).



 

Key Superannuation Thresholds – 2018/19

Concessional Contributions Caps – 2019 and 2018

Concessional contributions include employer contributions (including contributions made under a salary sacrifice arrangement) and personal contributions claimed as a tax deduction by a self- employed person.

 

Income Year

Age at Year-end

Amount of Cap1

2018/19

N/A

$25,000

2017/18

N/A

$25,000

1 Individuals with a total superannuation balance of less than $500,000, are broadly able to make additional catch-up concessional contributions of unused concessional contribution cap amounts accruing from the 2019 income year.


 

Non-concessional Contributions Caps – 2019 and 2018

Non-concessional contributions include personal contributions for which taxpayers do not claim an income tax deduction1.

 

Income Year

Amount of Cap1

2018/19

$0 or $100,000 annually or $200,000 over 2 years or $300,000 over 3 years2

2017/18

$0 or $100,000 annually or $200,000 over 2 years or $300,000 over 3 years2

  • If an NCC is made in excess of the annual cap in an income year, this will trigger an increased NCC cap under the ‘bring-forward rule’ for eligible fund members. If this rule was triggered prior to the 2018 income year, a 3-year NCC cap applies in respect of NCCs made over the following 3 income years (the 3-year cap amount is subject to transitional rules in some cases – noted below).  However,  if the 'bring forward rule'  was triggered in the 2018 or 2019 income years, the period over which the ‘bring-forward rule’ applies varies depending broadly on the member’s total superannuation balance (‘TSB’) at specified times.

Note that, in order to access the ‘bring-forward rule’, the member must be aged less than 65 years at any time in the income year in which the rule is first triggered (the 'work test' must also be considered, if NCCs are made after the member turns 65).

  • If the member’s TSB on 30 June of the previous income year was $1.6 million or more, the member’s NCC cap for the income year is reduced to nil and the member is unable to make a NCC in that income year (without breaching their cap). If the fund member’s TSB on that date was less than $1.4 million, the NCC cap under the ‘bring-forward rule’ is $300,000 over the following 3-year period (although their TSB must  also be reassessed if NCCs are made under this cap in the subsequent 2-year period). If the fund member’s TSB on 30 June of the previous income year was between $1.4 million and less than $1.5 million, the NCC cap under the ‘bring-forward rule’ is $200,000 over  the following 2-year period (note that, the member's  TSB must be reassessed if NCCs are made under this cap in the subsequent year). If the member's TSB on that date was $1.5 million to less than $1.6 million, the $100,000 annual NCC cap applies.


CGT Cap Amount

An individual can elect for certain contributions made to a superannuation fund in connection with applying the CGT small business 15-year exemption or the retirement exemption to  count towards the CGT cap rather than their non-concessional contributions cap. The CGT cap amount is a lifetime limit.

 

Income Year

Amount of Cap

2018/19

$1.480 million


 

Government Co-contribution Table for Low Income Employees

The superannuation co-contribution was initially introduced by the Government from 1 July 2003 as an incentive to encourage low income earners to save for their own retirement.

If an individual satisfies the income tests for the co-contribution (and other eligibility requirements), and they make personal (non-concessional) superannuation contributions, the Government will match their contribution with a 'co-contribution'.

The government will contribute $0.50 for every $1 an eligible individual contributes into superannuation, up to the maximum co-contribution outlined in the following table for these years. From 1 July 2017, an individual is ineligible for a co-contribution if the individual's non-concessional contributions ('NCCs') exceed their NCC cap or their total superannuation balance is $1.6 million or more on 30 June of the prior income year.

 

Income Year

Total Income1

Calculation of Maximum Co-contribution

 

2018/19

$0 - $37,697

$37,698 - $52,696

$52,697 +

$500

$500 - [3.333% x (total income - $37,697] Nil

1 Total Income is calculated as the sum of assessable income, the reportable fringe benefits total and reportable employer superannuation contributions. Where the taxpayer carries on business, deductions can be taken into account (other than for the 10% test where relevant).


 

General Transfer Balance Cap

The general transfer balance cap amount is used for a number of purposes, including:

  • to determine the total capital amount that can be transferred into the retirement (pension) phase; and
  • to determine eligibility for making non-concessional contributions from 1 July 2017.

 

Income Year

General Transfer Balance Cap

2019

$1.6 million


Lump Sum Superannuation Benefits – Low Rate Cap Amount

The application of the low rate threshold for superannuation lump sum payments is capped. The low rate cap amount is reduced by any amount previously applied to the low rate threshold

 

Income Year

Cap Amount

2018/19

$205,000


Superannuation Guarantee Rate

Employers who provide less than a prescribed level of superannuation support (the 'charge percentage', generally applied to the employee's ordinary time earnings) for their employees are liable to pay a superannuation guarantee charge based on the shortfall (calculated with reference to "salary and wages") plus an interest component and an administration charge.

 

Income Year

Charge Percentage

2018/19

9.5%


Superannuation Guarantee – Maximum Contribution Base

Income Year

Maximum Employee Earnings (per quarter)1

2018/19

$54,030

1 For superannuation guarantee purposes, employers do not have to provide superannuation support for a quarter on that part of an individual employee’s ordinary time earnings above this limit.

Last modified: 11 Dec 2019

 

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