The budget announcements will include a doubling of the contributions tax on concessional contributions to 30% for individuals who earn at least $300,000 in income from 1 July 2012.
The definition of income will be broad and includes taxable income, concessional superannuation contributions (both superannuation guarantee charge contributions and salary sacrifice contributions), adjusted fringe benefits, total net investment losses, some foreign income, tax-free pensions and benefits less child support.
Where the $300,000 limit has been breached because of the level of concessional contributions the 30% contribution tax rate will only be applied to the amount of the contribution which caused the breach. On this basis an individual with $280,000 in taxable income who has made a $25,000 concessional contribution would pay the 30% contribution tax on $5,000.
No indication has been given as to the manner in which this measure is to be administered.
Source: Bendzulla Actuarial May 2012