In this guide
Building a sizeable retirement nest egg can take some effort, but most employees leave the heavy lifting to their employer.
While your employer’s compulsory Super Guarantee (SG) contributions provide some level of financial security in retirement, if you are relying on that alone you risk not having enough super to enjoy the retirement you dream of.
The solution is to give your super account a boost by making some extra contributions yourself. To help you understand your options and what could work for you, here’s an overview of the main types of super contributions.
Watch our short video intro first, or dive straight into the detail below.
Super contributions: The two basics you need to know
1. It’s all about the tax
The key to understanding different types of super contributions is to remember it’s all about what tax you pay. There are two main types of super contributions:
You may also receive contributions into your super account from the Australian Government that are not counted as either concessional or non-concessional if you meet certain eligibility criteria.
2. There are annual caps on your contributions
As there are tax benefits from holding savings in your super account, the government has set annual caps or limits on both your concessional (before-tax) and non-concessional (after-tax) contributions into super.
The caps are indexed and any contributions you make over these annual limits are subject to extra tax. The limits apply to the total of all your super accounts across different super funds.
Note: The general annual limits apply to a financial year (1 July to 30 June the following year), rather than a calendar year (1 January to 31 December the same year).
Contribution type
Concessional (before-tax) contributions
- $32,500
- If you have a Total Super Balance of less than $500,000 on 30 June of the previous financial year, you can roll forward any unused amount of your cap for up to five years to contribute more than the standard cap in one year without generating excess contributions that are subject to additional tax. This is known as carry forward.
Non-concessional (after-tax) contributions*
- $130,000 if your Total Super Balance was less than $2.1 million on the prior 30 June
- $390,000 over a three-year period if you are aged under 75 and using the bring-forward rule. Note if your Total Super Balance was $1.84 million or more on the prior 30 June the bring forward rule is modified.
- Nil if your Total Super Balance was $2.1 million or more on the prior 30 June.
Concessional (before-tax) super contributions: 4 main types
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