Before the surcharge was abolished for the 2005–06 and later financial years, the maximum surcharge rate was gradually reduced to:
- 15% for the financial years 1997–2003
- 14.5% in 2003–04
- 12.5% in 2004–05.
The maximum surcharge rate applies to surchargeable contributions if a person's adjusted taxable income exceeds the higher income amount.
No surcharge will apply if a person's adjusted taxable income is equal to or below the lower income amount.
If the adjusted taxable income is between the lower income amount and higher income amount, the surcharge rate will be calculated using the following formula:
- Rate = Adjusted taxable income − Lower income amount ÷ Divisor
Example: Calculating the surcharge rate
Robert's adjusted taxable income for the 2003–04 financial year was $103,762. For the same financial year, his accumulation super fund reported that he received contributions of $9,000 and that these were employer contributions only.
According to the formula, his surcharge rate will be calculated as follows:
$103,762 − $94,691 ÷ 1,399.31034 = 6.48248%
This surcharge rate is applied to Robert's surchargeable contributions to calculate his liability as follows:
$9,000 × 6.48248% = $583.40
Therefore a surcharge assessment for $583.40 will be issued to Robert's super fund.
End of example