From 1 July 2017, the concessional contribution cap for people aged 49 or over on 30 June 2018 is $25,000. Those under 49, will also have a concessional contribution cap of $25,000.

This could become a surprise for members who aren't aware of the change and continue making contributions in excess of this $25,000 concessional cap. Any amount over the new $25,000 cap will be charged excess tax of 31.5%. It is time to remind your payroll officer to reduce your super contributions if you are salary sacrificing into super.

For example, your salary is $100,000 and your employer makes $9,500 super guarantee contribution into your SMSF. You have instructed your employer to salary sacrifice an extra $25,000 into super. This means your total concessional contribution into super is $34,500. This is over the $25,000 concessional contribution cap. The extra $9,500 is hit by excess contributions tax of $9,500 x 31.5% = $2,992.50. This tax is payable by you as an individual or the SMSF (if you don't have cash).

You can avoid this by taking time in calculating your super guarantee and carefully figure out the amount you want to salary sacrifice. The total concessional super contribution must not be over $25,000.