Super contributions: Adding extra money to your super

Salary sacrifice

You can arrange for your employer to make additional super contributions on your behalf in return for giving up some of your before-tax income. These are known as ‘salary sacrifice’ contributions.

Salary sacrifice contributions are generally only taxed at 15%, while the tax rate you pay on your income can be as high as 47% (including the Medicare levy), depending on how much you earn. That makes super an extremely tax-effective investment! Even if you’re a high-income earner and have to pay extra tax on your contributions, the tax savings are still significant. 

Learn more about salary sacrifice

Personal contribution

Personal contributions are when you use some of your after-tax income or savings to make an additional contribution to your super.

You can generally claim a full tax deduction for some or all of your contribution as long as you’re younger than 67. This will reduce your taxable income and the amount of tax you pay. You’ll need to send a form called Notice of intent to claim a tax deduction to your super fund and wait for their acknowledgement before you can claim it as a deduction. 

Make sure you take note of the timeframes and rules for providing the notice of intent form, otherwise your tax deduction might not be allowed. You’ll find all this information on the form.

How to make a personal contribution

If you’re an employee, have annual income of less than $58,445 (for the 2023-24 financial year), and you make a personal contribution to super that you don’t claim a tax deduction for, you may be eligible to receive a government co-contribution.

The government will pay up to $500 per year into your super, depending on your income and the amount of your contribution. You don’t need to complete any forms or notify your super fund – it will be automatically calculated and paid into your super after you lodge your tax return.

It’s possible to make a contribution to your spouse’s super from your after-tax income or receive a contribution to your super from them. Sometimes couples do this when one of them isn’t working, or if one person earns more than the other. 

The person that makes the contribution may be able to claim a tax offset of up to $540 for the contribution, depending on their spouse’s income and the amount of the contribution. You can’t claim a tax deduction for a spouse contribution. 

If you’re 55 or over and you sell a home that you’ve owned for at least 10 years, you may be able to contribute up to $300,000 of the proceeds from the sale of your home into your super. 

The contribution is completely tax-free when you deposit it into your super, and you can also withdraw it tax-free later on. What’s more, downsizer contributions don’t count towards the other contributions caps. So it’s a great way to top up your retirement savings. 

To make a downsizer contribution, you need to fill out the ATO’s Downsizer contribution into super form and send it to your super fund before making the contribution and within 90 days of selling your home.  

The eligibility rules and impacts on your Age Pension entitlements for downsizer contributions can be complicated, so it’s best to talk to a financial adviser first.

Who can make a downsizer contribution? 

You may choose to make regular additions to your super through a salary sacrifice arrangement or make a larger one-off contribution if you have some money to spare, such as savings or an inheritance. 

The trade-off is that once you put money into your super account, you generally can’t take it out again until you retire. So make sure it’s money you can afford to part with.

Sometimes it’s possible to make a larger contribution above the general limits (the concessional and non-concessional contributions caps).  

Making a larger before-tax (concessional) contribution

The combined amount of concessional contributions you can make in a year is $27,500. However, if you haven’t used your total cap in a previous financial year, it may be possible to carry across the unused amount for up to five years. This would allow you to make a larger concessional contribution. 

For example, if your concessional contributions totalled $20,000 last financial year you may be able to use that extra $7,500 to increase your concessional contributions cap for this financial year to $35,000.

Can I make a larger concessional contribution?

Making a larger after-tax (non-concessional) contribution

The combined amount of non-concessional contributions you can make in a year is $110,000. However, depending on your age and super balance, you may be able to bring forward future years of your non-concessional contributions cap to make a large contribution of up to $330,000 in a single year. 

Can I make a larger non-concessional contribution?

When an employer makes a contribution on your behalf, or you make a personal contribution that you claim a tax deduction for, it’s taxed at 15%. 

If you earn less than $37,000 per year, the government may make a contribution to your super account of up to $500 to offset the tax. 

If you earn more than $250,000 per year, you may have to pay an additional 15% tax for your contributions.

When you make personal contributions that you don’t claim a tax deduction for, contributions tax doesn’t apply. This is because you’ve already paid income tax on that money.