I was reading the Money section in yesterdayís Sydney Morning Herald and David Potts talks about the penalty taxes on excess super contributions.
He cites the case of a woman who exceeded the limits by $10.30 and was hit with penalty tax of $69,754.00. Iíve seen this case quoted in Money before, but for the life of me I canít understand how this can be.
I thought the excess tax was applied to the amount of excess contribution and could be up to 93% if both concessional and non-concessional limits are breached. So why has this woman been taxed $69,754 and not $9.58?
Does anyone here know how this could be? The articles Iíve read donít give any insight and Iím concerned that I might be misunderstanding how the tax works.