The non-concessional contributions cap generally includes any personal after-tax contributions for which a tax deduction has not been claimed. The Government’s contribution under the co-contribution scheme is not included in the cap.
Under age 67 a maximum limit of $110,000 per year or $330,000 every three years (known as the ‘3-year bring forward rule’) applies. No non-concessional contributions are permitted if your superannuation balance at the start of the year is over $1,700,000 (and the 3-year bring forward rule phases out once a super balance reaches $1,480,000). Over the age of 67, the 3-year bring forward rule ceases to be available and it is limited to $110,000 of non-concessional contributions a year as long as you satisfy the work test.
Any contributions in excess of the cap can be elected to be withdrawn from super along with associated earnings. If withdrawn, the contribution amount is tax-free but the associated earnings are added to taxable income with tax payable at marginal tax rates including levies plus penalties.
If the election to withdraw is not made, the excess contributions are taxed at 45% plus 2% for Medicare Levy (for 2021/22).
Please note: As part of the ‘More Flexible Super’ legislation, a member that released amounts from superannuation under the COVID 19 early release rules can recontribute those amounts without counting towards their non-concessional cap. However, it must also be noted that the member can’t claim those recontributed amounts as a tax deduction.