Here are the different types of super contributions that can make up your super balance.
Employer super contributions
An employer super contribution is the amount of super your employer must pay on your behalf. The amount they must pay is called the super guarantee
What is the super guarantee?
The super guarantee is the percentage amount of your paycheck your employer must pay to your super fund.
It’s been rising by .5% per financial year over the past few years, and is set to tap out at 12% from 1 July 2025.
| Date | Super Guarantee |
|---|---|
| 1 July 2024 - 30 June 2025 | 11.5% |
| 1 July 2025 onwards | 12.0% |
Your employer can pay more than the super guarantee, but they can’t pay less.
Personal super contributions
These are extra contributions you make on your own behalf.
The aim of super is to help you retire like a fat cat and extra personal contributions can typically help.
Personal super contributions – salary sacrifice
Salary sacrificing is when you arrange to have some of your salary paid as super contributions instead of as part of your take home pay.
People generally do this because it typically reduces the amount of tax they pay overall.
People who salary sacrifice see less money in their paycheck than they otherwise would, but this typically reduces their taxable income, which can lower their tax bill.
Spouse super contributions
These are contributions you make to your spouse’s super, or contributions you’ve already made to your own super that you roll over to your spouse’s.
Government co-contributions
If you’re eligible, the government may contribute up to $500 to your super account, each financial year, so long as you meet conditions first, including making your own super contribution first.
Here’s more info about the super co-contribution.
First Home Super Saver scheme contributions
These are contributions you make to your super fund with the intent of withdrawing them to put toward your house deposit.
You can generally withdraw up to $50,000 worth of voluntary contributions you’ve made to your super, up to $15,000 worth per year.
Check out Spaceship First Home for more about how your super can support you buying your first home.
What are concessional and non-concessional contributions?
Here’s where it can get tricky.
Each of these contributions is classified as being either concessional or non-concessional and it has to do with how they’re taxed.
The Australian Tax Office (ATO) defines income that has not yet been taxed as ‘before tax contributions’ and they’re known as concessional.
The ATO calls income that has already been taxed ‘after tax’ contributions and they’re known as non-concessional.
What are concessional contributions?
Common concessional contributions include:
- Employer contributions
- Salary sacrified contributions
- Personal contributions you claim a tax deduction on
Concessional contributions generally get taxed at 15%.
Need to claim a tax deduction? Here’s some more about how that works.
What are non-concessional contributions?
Common non-concessional contributions include:
- Some contributions your spouse might make to your super fund
- Personal contributions you haven’t claimed as tax deductions
Non-concessional contributions aren’t taxed again when they reach your super fund, but this is because you already paid tax on that money before it landed in your bank account.
Contributions cap limits
There are limits to the amount of concessional and non-concessional contributions you can make each financial year.
What’s the concessional contributions cap?
From 1 July 2024, the concessional contributions cap is $30,000 for the 2024 financial year.
What’s the non-concessional contributions cap?
From 1 July 2024, the non-concessional contributions cap is $120,000 for the 2024 financial year.
What happens if you exceed a contributions cap?
Generally, the consequences of exceeding a contributions cap depend on the particular cap you exceed.
If you go over your concessional contributions cap, your excess contributions are included in your assessable income, which means you pay your normal rate of tax on them.
But, because they’ve already been taxed at 15% upon entry to your super fund, the amount of tax you’ll pay is reduced by that amount.
If you go over the non-concessional contributions cap, you’ll generally have to choose between getting your excess contributions plus 85% of their associated earnings released from your super fund, or paying an excess non-concessional contributions cap, which is charged at the highest marginal tax rate plus Medicare levy.
However, this will depend on whether you have any unused cap amounts you may be able to bring forward. It gets pretty complex – so make sure you check out the ATO website and get professional, personal advice specific to your circumstances.
What are the carry forward and bring forward rules?
On some occasions, you’re able to exceed the contributions caps provided you meet specific eligibility criteria. These include:
- The carry forward rule: This lets you use any unused concessional cap amounts you may have from the previous five financial years. It allows you to contribute more than the concessional cap amount into your super, providing you meet certain criteria. You can check out the ATO website for more.
- The bring forward rule: This is similar, but it lets you, if you’re eligible, bring one or two years of your annual non-concessional cap from future years forward to the current financial year. Again, there are criteria you need to meet, and you can find out about it on the ATO website.
Remember – this information is general in nature and should not be taken as tax advice. It’s worth taking a closer look at what the ATO says, and seeking personal financial advice from a registered tax agent if you’re unsure, for more.
