Maximum contribution levels

Tax deductions
The government has eliminated age-based limits on deductible contributions. Employers can now claim a full deduction for all contributions on behalf of employees aged less than 75.

Concessional contributions
The government has imposed an annual cap of $50,000* on concessional contributions. All contributions that exceed this limit will be taxed at an effective rate of 46.5%. Under transitional arrangements, a higher limit of $100,000 per annum (not indexed) will apply until 30 June 2012 for individuals aged 50 or over.

Non-concessional contributions
There is an annual cap on these types of contributions of $150,000 per annum* (or $450,000 over a three year period for members aged under 65). If contributions exceed this cap, the amount over this limit will be taxed at the highest level of 46.5%.

* Indexed from time to time to the movement in Average Weekly Ordinary Time Earnings (AWOTE). Figures current as at June 2008.

Tax File Numbers and member contributions

CONNECT can not accept member after-tax contributions unless we have the member's Tax File Number. If we do not have the Tax File Number we can still accept pre-tax salary sacrifice contributions, but penal tax applies and the contributions will be taxed at the top marginal tax rate, plus the Medicare Levy. We will be advising members who wish to make contributions to CONNECT to make sure we have their correct Tax File Number.

Remember TFN laws require you to pass on the TFNs of employees to CONNECT where the employee has quoted the TFN to you for superannuation purposes. The TFN is generally required to be quoted to the superannuation fund when you next make a superannuation contribution for the employees who quoted their TFN to you.