How to make contributions over the concessional cap (a workaround)

Run a preliminary scenario to check their contributions up to the concessional cap and see what their excess contributions could be

First, run a preliminary scenario where the individual makes concessional contributions up to the cap.  This will give you an indication of when it will be possible to make contributions over the cap:

1. Go to the Retirement planning sub-step (under the Cash flows & Goals step on the top menu), and find the individual you would like to make contributions for

2. For the 'Voluntary super contribution options' field, choose the robot icon: 

3. Review the option you've chosen for the 'Allow carry forward of unused concessional cap' - it will depend on your case whether it's useful to apply it. For more, see How to include or exclude the unused concessional cap carry forward rule

4. In the results, you can check in what years super contributions are being made and whether they are close to the cap:

   1. Go to the Detailed reports sub-menu (on the Results step on the top menu)

   2. On the left menu, select the individual's name and then: Cash flows > Super deposits summary

   3. On the 'Super deposits summary' report, in the 'Concessional deposits' section, you can see the contributions being made, and how close they are the to legislated cap

   4. You download this report in a spreadsheet by using the 'Download CSV' button

5. You can use the reports to help you decide in what years they should make excess contributions and how much the excess is by seeing:

   1. In what years the individual is making contributions up to the cap

   2. How much spare cash is available for the individual to use for contributions

Calculate their excess contributions (including tax)

For each year the individual is making an excess contribution, you need to calculate these numbers:

1. The total contribution you'd like the individual to make

2. The annual cap

3. The excess contribution amount

4. The excess contribution after tax, if contributions tax is applied to their contributions (e.g. standard concessional contributions have 15% contributions tax, but the super fund may have a different rate)

You should also check that the excess contributions keep within the rules that the individual should follow for their specific super fund (e.g. if there is a life time limit, then you should make sure your calculations keep within that limit)

For example, if you want the individual to contribute $30,000 in a single year, then:

1. You'd like the individual to make a total contribution of $30,000

2. The annual cap is $27,500 in 2021/22

3. The excess contribution amount is: $30,000 - $27,000 = $2,500

4. The individual's contributions tax is 15%, so the excess contribution after tax is: $2,500 - (2,500 x 0.15) = 2,125

Enter the contributions over the concessional cap as an Income cash flow owned by the super fund or SMSF.

Once you have calculated the contributions over the concessional cap, they should be entered as an income owned by the superannuation fund or SMSF:

1. Go to the Cash flows sub-step (under the Cash flows & Goals step on the top menu)

2. Add an 'Income' with the following details:

   1. Type = Non taxable

   2. Name e.g. Extra concessional deposit

   3. Owner = the superannuation fund or SMSF that will be receiving the contribution

   4. Amount = the amounts you calculated in the previous step. If contributions tax is deducted, then you should enter the 'after-tax' value. Note you can use the 'Customise' button to add different values in different years (just make sure you choose 'Index = none')

Your cash flow will look something like:

Enter the Expense cash flow for the funds required to make the extra concessional contributions

1. Go to the Cash flows sub-step (under the Cash flows & Goals step on the top menu)

2. Add an 'Expense' with the following details:

   1. Type = 'Other'

   2. Owner is the individual

   3. Value = Enter the extra concessional contributions, before tax, using the series builder.

Your cash flow will look something like:

Adjust the results

In the results, you'll need to note that:

• In the Cash flows (detailed) report in the Expenditure section, the expense will be reported as a 'Miscellaneous expense' on a separate line.

• The extra deposit to the super fund or SMSF will be reported in its Transaction account (detailed) report, in the Revenue section, as a 'Miscellaneous income'.

• The Strategy summary and Action items will only report on concessional contributions up to the cap, so you'll need to manually add notes about contributions over the cap.