If your concessional contributions to super exceed $30,000 in a financial year (FY2025–26), you have made excess concessional contributions. The ATO will automatically assess these excess amounts and tax them at your marginal income tax rate — instead of the standard 15% inside the fund.
This can catch people by surprise, particularly those who make both employer contributions and voluntary salary sacrifice or personal contributions without tracking the combined total.
The Concessional Contributions Cap
Concessional contributions include:
- Employer SG contributions (12% of ordinary time earnings from 1 July 2025)
- Salary sacrifice contributions
- Personal contributions where you claim a tax deduction under Section 290-170
Cap: $30,000 per financial year (FY2025–26). This cap was increased from $27,500 in FY2024–25.
What Counts Toward the Cap
All concessional contributions made to all your super accounts in a financial year are counted together:
- If you have multiple employers, all employer contributions count
- If you change jobs mid-year and receive SG contributions from two employers, both count
- If you salary sacrifice and your new employer also contributes SG, the total of both must stay within $30,000
Common situations that cause accidental excess:
- High earners whose SG contributions (12% of high salary) approach or exceed the cap
- People who salary sacrifice without checking their employer SG total first
- People with multiple employers or concurrent employment
- People who claim a personal contribution deduction under s290-170 without checking their employer SG total
How the ATO Processes Excess Concessional Contributions
Step 1 — Identification
The ATO identifies excess concessional contributions automatically through data from your super fund (via member contribution statements). You do not need to self-identify or report the excess — the ATO will detect it.
Step 2 — Excess CC Assessment
The ATO issues an Excess Concessional Contributions Tax Assessment. The excess amount is:
- Included in your assessable income for that financial year — taxed at your marginal rate (including Medicare levy)
- A 15% offset is applied — because the contributions were already taxed at 15% inside the fund, you only pay the difference between your marginal rate and 15%
Example:
- Your marginal rate is 37% (+ 2% Medicare = 39%)
- Excess CC: $5,000
- Tax on excess: $5,000 × 39% = $1,950 (gross tax)
- Less 15% offset: $5,000 × 15% = $750
- Net additional tax payable: $1,200
The effective rate on the excess is your marginal rate minus 15%.
Step 3 — Associated Earnings Charge
The ATO also charges an excess concessional contributions charge (interest) on the excess amount. This is a shortfall interest charge calculated from the start of the relevant financial year to the date the assessment is issued, to compensate for the fact that the excess sat in your fund at a concessional 15% rate while it should have been taxed at your marginal rate from the start of the year.
Step 4 — Election to Release Excess from Super
You have the option to elect to release up to 85% of the excess from your super fund. The ATO will send a release authority to your super fund:
- The amount released does not count as a withdrawal toward the low-rate cap
- The amount released does not affect your non-concessional cap
- The 85% (not 100%) reflects the 15% contributions tax already paid — effectively releasing the after-15%-tax equivalent
If you do not elect to release: The excess stays in super. You still pay the income tax and charge on the excess, but the gross excess amount (100%) remains in super — this means super has received an effective non-concessional contribution equal to the after-tax excess amount.
Using Carry-Forward Concessional Contributions
If you had a total super balance (TSB) under $500,000 at 30 June of the prior financial year, you may be able to carry forward unused concessional cap amounts from the previous 5 years.
Carry-forward amounts can increase your effective CC cap in the current year beyond $30,000 — potentially preventing an excess if you make catch-up contributions.
How to check: The ATO’s myGov portal shows your available carry-forward amounts.
How to Avoid Excess Concessional Contributions
1. Track your employer SG contributions: Before setting up or increasing salary sacrifice, confirm your employer’s SG contributions for the year. At 12% SG, an employee earning $250,000 is already contributing $30,000 — leaving no room for salary sacrifice.
2. Monitor your cap through myGov: The ATO’s myGov portal displays your year-to-date concessional contributions as reported by your fund.
3. Adjust salary sacrifice before year-end: If you see you’re approaching the cap, you can reduce or stop salary sacrifice before 30 June.
4. Be careful with personal deductible contributions: If you plan to claim a tax deduction on personal contributions (via a Notice of Intent to Claim), add this amount to your employer SG total to ensure the combined total stays within $30,000.
Frequently Asked Questions
I accidentally exceeded the CC cap — how much extra will I pay? The additional tax is the difference between your marginal income tax rate (plus Medicare levy) and 15%, applied to the excess amount. At the 32.5% marginal rate + 2% Medicare = 34.5% rate, the additional tax on a $5,000 excess is approximately 34.5% – 15% = 19.5% × $5,000 = $975 (plus the shortfall interest charge).
Can I avoid the penalty by withdrawing the excess from super? You can elect to release up to 85% of the excess, but you still pay the income tax and shortfall charge. You cannot entirely avoid the tax by withdrawing — the excess has already been included in your assessable income.
Does excess CC count toward my non-concessional cap? Generally, no. Excess concessional contributions that are assessed are not also counted as excess non-concessional contributions — there are specific provisions preventing double counting. However, if you do not elect to release the excess, the gross excess remaining in super is treated as a non-concessional contribution, which may create problems if you also exceed the NCC cap.
I have multiple jobs — can I avoid an excess? You can ask one employer to reduce SG contributions (they may be able to if there is flexibility), or you can coordinate contributions to stay within the cap. If you cannot control employer contributions and they total over $30,000, you would have an excess — but the ATO is aware this can occur inadvertently with multiple employers and the process is handled administratively.
For official guidance, see the ATO’s excess concessional contributions information. For personal advice on contribution strategy, consult a licensed financial adviser or registered tax agent.