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Grow your super by making extra contributions

Super remains one of the best ways to save for your retirement due to the tax concessions it offers.

Relying solely on your employer’s super guarantee contributions may not be enough to provide you with a comfortable retirement. By contributing extra money to your super, your super balance will grow more quickly, giving you more money to enjoy in retirement.

How to contribute more to super

Salary sacrifice

You can ask your employer to set aside some money from your before-tax salary and put it directly into your super.

What are the benefits?

  • Salary sacrificing into your super is a great way to increase your super balance. This means you will have more money when you get ready for retirement.
  • Salary sacrifice contributions are only taxed at the rate of 15 per cent going into the super fund, compared with cash salary, which is taxed at your marginal tax rate.

What are the limits to salary sacrificing?

There is no limit, however contribution caps are in place restricting the amount of money that can be salary sacrificed into super before additional tax is payable. The concessional cap is $30,000 and includes your employer's compulsory super contributions. If you exceed the cap, the excess will be taxed as income in your hands and you have a choice of either having those contributions returned or added to your non concessional cap.

Some things you may need to consider

Salary sacrificing into super may not suit everyone. You should consider some of the possible impacts:

  • Talk to your employer to find out if they offer salary sacrificing and if it will affect any other employment benefits you receive, such as compulsory Superannuation Guarantee contributions, annual leave and leave loading.
  • Realise that people on a higher marginal tax rate are more likely to have bigger benefits from salary sacrificing.
    There are caps to how much you can contribute to your super each year (this is called a concessional contribution cap). Speak to talk to your adviser or visit the ATO website to make sure you don't hit the cap.
  • Determine whether you would like to salary sacrifice a flat sum, a recurring sum or a percentage of your salary. Alternatively you could look into sacrificing part or all of any future bonus payments to your super, but make sure that you speak to your employer about this before you get your bonus.

Make contributions from your after-tax salary

Any contributions you make to super with your after-tax money are classified as either non-concessional or concessional contributions. The main differences between the two different types of after-tax contributions are:

  • how they are taxed in the super fund
  • the maximum amount you can contribute.

If you make a contribution to super with your after-tax money and then claim a tax deduction for the amount you contributed, it is classified as a concessional contribution. Concessional contributions are taxed at 15 per cent in your super fund.

If you make a contribution with your after-tax money and do not claim a tax deduction for the amount you contributed, it is classified as a non-concessional contribution. These contributions are not taxed in the super fund.

How much can you contribute?

Concessional contributionsNon-concessional contributions
  • You can contribute $30,000 in concessional contributions annually.
  • All employer contributions, salary sacrifice and personal contributions where you claim a tax deduction, are counted towards this cap.
  • If you have less than $1.9 million in super, you can contribute $120,000 annually or up to $360,000 over three years if you are aged under 75.
  • You cannot make non-concessional contributions if you have more than $1.9 million in super.

Take advantages of co-contributions

The co-contribution scheme was introduced by the Government to encourage and boost the super savings of low income earning Australians.

You may be eligible for the Government's super co-contribution if all of the following apply:

  • your total income for the 2024-25 financial year is less than $60,400
  • you make a personal after-tax super contribution(s) to your fund by 30 June and do not claim a tax deduction for it
  • at least 10% of your 'total income' comes from employment-related activities, and/or running a business
  • you lodge an income tax return for the financial year
  • you are a permanent resident of Australia and less than 71 years of age at the end of the financial year
  • you have not contributed more than the non-concessional contribution cap of $120,000 during the financial year
  • you have a total superannuation balance less than $1.9 million.

How much do I need to contribute to receive a Government super co-contribution?

The government contributes 50 cents for every $1 you contribute. So, if you're eligible and earn under $45,400 in the 2024-25 financial year, making an after-tax contribution to your super can result in a government co-contribution of up to $500. If your earnings are between $45,400 and $60,400, you may still qualify for a partial co-contribution, which decreases as your income increases. For those earning over $60,400 per year, the co-contribution is not available.

Need help with super contributions?

You may want to speak to your financial adviser before deciding to make extra contributions to super.