I have read the ATO information on Concessionary Contribution Cap, understanding that they carry forward for up to 5 years. I have a practical question on how this works year-on-year. 5 years ago I had $10,000 unused concessional cap accumulated that year, and then every year after that my employer contributed precisely the exact amount of the cap every year meaning nothing additional was accumulated. I therefore have $10,000 unused concessional cap accumulated as at now FY2025-26. This year in FY2025-26, my employer will again contribute precisely the exact of the cap. I am considering making a salary sacrifice concessionary contribution of $10,000 utilising the unused cap accumulated from 5 years ago. I'm concerned that, following the worked example on the ATO website, if I were to make this $10,000 contribution now, how the ATO calculation would show this time next year in FY2026-27. In particular, the unused cap from 5 years ago now in FY2025-26 would then become from 6 years ago in FY2026-27 and become ineligible to be included in the 5-year accumulation at that time. This means the accumulated unused concessional cap will then show $0. But the 5-year aggregate amount of actual concessionary contributions I would have made by then, when it's calculated next year, would show that it's $10,000 in excess of the aggregate concessionary contribution cap over the same 5-year period, because I contributed the $10,000 in FY2025-26 which still gets accumulated despite the original unused cap amount having rolled-off the 5-year aggregation. So by this time next year, would the ATO then consider the $10,000 salary sacrifice I make this year that are considered to be concessionary this year in FY2025-26 (and hence no excess concessional contribution tax paid for FY2025-26) to all of a sudden be excess in FY2026-27 (and hence attracting excess concessional contribution tax for FY2026-27)?
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There are more complex scenarios on how the cap aggregation interacts with passage of time, and I would like to be sure before I make a salary sacrifice. Say for example this year I end up not work that many jobs for whatever reason, such that by the end of FY2025-26 my employer contributes $9,000 less than this year's cap (i.e. contribute $21,000); and then I make the $10,000 salary sacrifice (covered in the original thread) anyway. By FY2026-27, aggregating across the 5-years to that point, I would then have contributed $1,000 over the 5 years more than the 5-year aggregate cap. Would the ATO tax me for $1,000 as excess contributions in 2026-27?
Hi @alexlawprg,
No, you won't be taxed on excess contributions in FY2026-27 for amounts properly used within your available cap in FY2025-26. The $10,000 unused cap from 5 years ago is available for you to use in FY2025-26, and once used, it's considered properly contributed within the rules.
Unused concessional cap amounts expire after 5 years if not used. The carry-forward rule works by automatically applying the oldest available unused cap amounts first. This means your $10,000 from 5 years ago will be used first when you make your salary sacrifice contribution in FY2025-26.
In your scenario, making a $10,000 salary sacrifice when your employer contributes $21,000 in FY2025-26 would be within your annual cap of $30,000. Since your total contributions ($31,000) are only $1,000 over the annual cap, your unused cap from previous years would automatically be applied to cover this small excess.
You can track your concessional contributions and available carry-forward amounts through ATO online services by selecting Super > Information > Carry forward concessional contributions.
Hi NikkiATO,
Yes I understand my unused cap from previous years would automatically applied to cover this small excess, but the point is that the unused cap will not appear next year given it's from 5 years ago now and will be 6 years ago from next year's perspective, but the excess I paid this year will appear next year given it'll be from 1 year ago from next year's perspective. So if you aggregate the unused cap and the actual contributions next year, you'll end up with $1,000 un-covered excess despite how there is no un-covered excess this year. But are you saying something different? You're saying that should I make a contribution in any financial year in excess of the concessionary cap of that year, then should this excess amount be covered under the oldest unused cap from the 5 years preceding the time when this contribution was made, then from the subsequent financial year onwards for the purpose of calculating the aggregate contributions over the preceding 5 years at these future points in time, this said excess amount would be perpetually excluded from the 5-year aggregation summation calculation?
Hi @alexlawprg,
It's probably best to speak directly with our super team. They can review your account details and walk through how your carry‑forward amounts are applied.
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