The end of the financial year is one of the most important times on the financial planning calendar, particularly when it comes to superannuation. With the right strategy, you can significantly boost your super balance while reducing your tax bill.
What are concessional contributions?
Concessional contributions are contributions made to your super fund from pre-tax income. They include:
- Employer contributions (including the Superannuation Guarantee)
- Salary sacrifice contributions (additional amounts you direct from your salary into super)
- Personal deductible contributions (contributions you make personally and claim as a tax deduction)
Concessional contributions are taxed at 15% inside the fund, which is significantly lower than most people's marginal tax rate. For someone on the 37% marginal rate, for example, redirecting income into super via salary sacrifice saves 22 cents in the dollar.
The concessional contributions cap
For the 2024–25 financial year, the concessional contributions cap is $30,000. This includes your employer's Superannuation Guarantee contributions (currently 11.5%).
If your employer contributes $11,500 on a $100,000 salary, you have $18,500 of remaining concessional cap space, which you could use through salary sacrifice or personal deductible contributions.
Catch-up contributions
If you haven't used your full concessional cap in previous years, you may be able to make catch-up contributions. This allows you to carry forward unused cap amounts from up to five previous financial years.
To be eligible, your total superannuation balance must be below $500,000 at 30 June of the previous financial year.
Catch-up contributions can be particularly valuable for people who:
- Took time out of the workforce
- Had lower income in earlier years
- Are now in a higher income bracket and want to maximise their tax savings
Personal deductible contributions
If you're self-employed, or if your employer doesn't offer salary sacrifice, you can make personal contributions to super and claim a tax deduction, provided you lodge a "Notice of Intent to Claim a Deduction" with your super fund before lodging your tax return.
This is one of the most effective tax strategies available to self-employed Australians.
What to do before 30 June
- **Check your current concessional contributions** for the year, your super fund's annual statement or member portal will show this.
- **Calculate your remaining cap space**, and consider whether to top it up via salary sacrifice or a personal contribution.
- **Check your carry-forward balance** if you have unused amounts from previous years.
- **Act before 30 June**, contributions must be received by your fund by this date to count in the current financial year.
The window to act is short, so it's worth reviewing your position now rather than leaving it to the last minute.
This article contains general information only. It does not take into account your personal financial situation or needs. Please seek advice from a licensed financial adviser before making any financial decisions.