Superannuation is more than just retirement savings — it can also be a powerful tool for reducing your tax bill. Whether you're an employee, self-employed, or running a business, understanding how super contributions work can help you build wealth and save on tax.
1. Types of Super Contributions
There are two main categories of super contributions:
✅ Concessional Contributions (before-tax)
- Includes employer contributions (including SG), salary sacrifice, and personal contributions you claim a deduction for.
- Taxed at 15% in the fund (or 30% if your income exceeds $250,000).
- Cap: $27,500 per year (2024–25)
✅ Non-Concessional Contributions (after-tax)
- Contributions made from your after-tax income (no deduction claimed).
- Not taxed in the fund if within the cap.
- Cap: $110,000 per year (or up to $330,000 under the 3-year bring-forward rule)
2. Tax Benefits of Concessional Contributions
- Reduce your taxable income (if you claim a personal deduction)
- Pay only 15% tax on contributions instead of your marginal rate (up to 47%)
- Ideal for self-employed individuals or those with irregular income
Example:
If you earn $100,000 and make a $10,000 personal super contribution, you may reduce your tax bill by around $1,700 after accounting for the 15% contributions tax.
3. How to Make Personal Contributions
- Make a bank transfer to your super fund
- Fill out a ‘Notice of Intent to Claim’ form and send it to your fund before lodging your tax return
- Wait for acknowledgment from the fund before claiming the deduction
4. Super Strategies Before 30 June
- Maximise contributions before EOFY to take full advantage of the caps
- Use carry-forward unused caps if your total super balance is under $500,000
- Split contributions with a spouse for tax and retirement planning benefits
- Consider spouse contributions to get a tax offset (up to $540)
5. Contribution Timing Tips
- Contributions must hit your super fund’s account by 30 June to count for that year
- Allow at least 10-12 business days before the end of June to make transfers
6. Things to Watch Out For
- Exceeding contribution caps may result in extra tax
- Check your total super balance — it affects your eligibility for bring-forward or catch-up rules
- You can’t access your super until you meet a condition of release (e.g., retirement or turning 65)
Final Tip
If you’re in a higher tax bracket or preparing for retirement, super contributions can significantly improve both your tax position and your future lifestyle. Small, consistent contributions today can mean big savings later.
Need help with your superannuation strategy?
We’ll help you navigate the rules, optimise your contributions, and make the most of your tax position. Book a consultation with our team today.
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