The three most common types of contributions made to super are:
- Before-tax contributions (concessional contributions);
- After-tax contributions (non-concessional contributions); and
- Super co-contributions.
Also known as concessional contributions, these are usually made into your super from your salary before you have paid tax. They include:
- Compulsory super guarantee (SG) made by your employer
- Salary sacrifice contributions (if you choose)
- Employer matching contributions (if applicable)
- Any personal contributions for which you notify the Trustee of your intention to claim as an income tax deduction.
Once the concessional contributions are in your super fund, they are taxed at the 15% rate.
There is a limit or cap on the amount of these contributions you can make each financial year. If you go over the cap, you may have to pay extra tax.
Catch-up concessional contributions
Catch-up (or carry-forward) concessional contributions allow an individual to carry forward unused concessional cap amounts.
If you’ve not made before-tax contributions up to the annual limits in recent years, then you can – if eligible – catch-up by making additional contributions from 1 July 2018:
- You can make 'carry-forward' concessional super contributions if you have a total superannuation balance of less than $500,000.
- If you’re aged between 65 and 74, and you meet the Work Test*, then you’ll be able to make carry-forward contributions.
- The first year in which you can catch up is the 2019/2020 financial year.
- You’ll be able to access any unused concessional contributions cap space on a rolling basis for five years.
- Amounts carried forward that have not been used after five years will expire.
Leyton is aged 46 and his current annual salary is $100,000. The balance in his super account is $400,000.
In 2018/2019, the total concessional contribution made into his super account is $10,000.
This means that in 2019/2020, Leyton is able to contribute $40,000 into his super account. The $40,000 consists of his normal annual $25,000 concessional contribution cap and $15,000, which is the unused concessional contribution amount from 2018/2019 carried forward ($25,000 – $10,000 = $15,000).
The entire $40,000 in concessional contributions will be taxed at 15% in the super fund. Prior to the new rules, any amount Leyton contributed in excess of his annual concessional cap would have been taxed at his (higher) margin tax rate.
Also known as non-concessional contributions, these are generally voluntary and can include contributions made by:
- member from after-tax income
- a spouse
The limit or cap for non-concessional contributions that you can make each financial year is $100,000. If you exceed the cap, you may have to pay extra tax.
If you are a low or middle-income earner, and make personal (after tax) contributions into your super fund, you could be eligible to receive a ‘bonus’ co-contribution of up to $500 from the Australian Government.
The amount you may receive depends on your income, your account balance in all your super funds (only applicable from 1 July 2017) and how much you contribute across all of your super accounts.
You cannot contribute in excess of your non-concessional contribution limit if you wish to receive the co-contribution. For additional information and the eligibility requirements, refer to Government co-contributions.
How to make a personal contribution
There are three ways you can make a personal contribution:
- Making a payment via BPAY®.
Our biller code is 18622. You can find out your reference number by logging into the secure member area or give us a call us on 08 9480 3500.
- By cheque, in person or by post.
- By making arrangements with your employer to make an after-tax payment.