Excess nonconcessional contributions – what are they?
Nonconcessional contributions are amounts you add to super from after-tax or tax-free money. These contributions are not tax-deductible. The government has set caps on nonconcessional super contributions for many years. In 2015, the caps increased due to earlier changes in superannuation legislation and indexation measures. Excess nonconcessional contributions are those that exceed the cap for any financial year.
Request a refund or super tax will apply
In its 2014 Federal Budget, the Government announced that superannuation members who exceed their nonconcessional contribution cap will be able to withdraw the excess contribution, plus any associated earnings, without having excess contributions tax levied on the amount.
On withdrawal of the excess and related earnings, the related earnings are taxed at your personal marginal tax rate. If you keep the excess nonconcessional contribution in super, it stays taxed. However, the fund will then tax the excess at the top individual marginal tax rate.
Excess nonconcessional contribution – or an alternative strategy?
The experienced advisers at Continuum Financial Planners Pty Ltd have wealth management strategies available to accumulate wealth in a structure that will provide substantial asset protection and whilst not taxed as beneficially as superannuation accounts, are tax effective in most cases. Some advantages of such an investment include:
- only incidental age-limit access (more liberal than the superannuation ‘condition of release’);
- you can exclude these from estate assets; and
- this structure keeps investment funds from being taxed at your high individual marginal tax rate.
If you would like to know more about making nonconcessional contributions, or about the alternative strategies that we can offer, please arrange an appointment with one of our advice team, by –
- phoning our office on 07-34213456, or
- at your convenience, use the linked Book A Meeting facility.
(This article was originally posted by us in April 2015. We occasionally refresh/ update it, most recently in July 2025.)