How to avoid exceeding super contributions cap


Superannuation is a great way to tax effectively save for retirement but, like anything, too much of a good thing can be bad for you.

Limits apply to how much you can contribute, and contributions that exceed these limits or 'caps' can result in additional tax. Also, if you're making different types of contributions and using different caps, an inadvertent breach of one cap may limit other contributions you can make.

Fortunately, there are four simple steps you can take to avoid exceeding the limits.

what happens if i exceed superannuation contributions cap

1. Check myGov - but be cautious

myGov is a great way to see how much you've contributed to super and contains some important information about your 'total super balance' to help you work out your contribution eligibility.

However, it's important to be aware what you see may not always be up to date. The information in myGov is based on what your super fund has reported to the Australian Taxation Office (ATO) and there may be delays in updating information.

For example, your total super balance may be updated as late as October 31 (or June the following calendar year for self-managed super funds). Make sure you're cross checking information on myGov with your own records and making inquiries directly to each of your funds before contributing.

2. Take care with personal deductible contributions

Personal deductible contributions are amounts you contribute from your savings into super and claim a personal tax deduction for.

This cap is currently $27,500 per year but may be higher if you meet certain eligibility rules and haven't used your entire concessional cap in each of the past five years.

When making a personal deductible contribution, you'll need to consider the amount and timing of other concessional contributions made throughout the year. Remember to account for:

  • employer contributions, including on any potential pay increase or bonus
  • salary sacrifice contributions, and
  • fees or insurance premiums covered by your employer, which are counted as concessional contributions.

There are also important timing and notification requirements when it comes to ensuring you're eligible to claim a deduction. If you don't follow these steps, you may not be able to claim a deduction, and these contributions will be assessed as personal contributions.

Personal contributions count towards your non-concessional cap. This cap is currently $110,000 per year. You may be eligible to bring forward up to an additional two years' worth of non-concessional contributions to contribute up to $330,000 in a single year.

If you're making use of both your concessional and non-concessional caps, it's important to get the steps right when making personal deductible contributions, to avoid having an excess non-concessional contribution, or triggering the 'bring forward rule' at a time you didn't anticipate.

3. Don't fail the downsizer rules

Downsizer contributions allow people aged 55 or over to contribute up to $300,000 from the proceeds of the sale of their home without impacting other contribution caps.

However, if you don't meet the timing, notification, or other eligibility requirements, the contribution may be treated as a personal contribution and will count towards your non-concessional cap instead.

This can be a problem if you've also made additional non-concessional contributions to super.

Importantly, it's your responsibility to get it right. Your super fund will not check whether you're eligible to make the downsizer contribution before accepting it.

4. Remember insurance premiums

Many people hold insurance in their super fund, in some cases in a super account dedicated specifically to holding insurance only.

Be sure to include any contributions you make to cover insurance premiums when you're tallying up your super contributions.

For more information about contribution limits, eligibility rules, and how excessive contributions are treated, speak to your financial adviser or visit

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Jenneke Mills is the head of technical services at MLC. Prior to this role, she worked as a financial adviser with NAB. Jenneke's areas of expertise include superannuation, self-managed super, retirement and estate planning, taxation, social security, and aged care. She has a Bachelor of Commerce from the University of Wollongong.