Growing your super is important to fund your retirement. In Australia, your employer must contribute to your super on a quarterly basis (as a minimum), but you can also add extra to your account with your before or after-tax earnings.
Concessional super contributions
Concessional contributions are funded by income that has not yet been taxed. They are also referred to as ‘before-tax’ contributions. These contributions are typically paid by your employer to your super account.
In Australia, the super guarantee (SG) is the compulsory contribution your employer pays into your super from your pre-tax salary. From 1 July 2023 the current SG rate is 11% of your earnings and is set to increase as outlined in the below table.
These contributions are taxed at 15%. Generally, all employees over 18 years, whether full-time, part-time or casual, are eligible to receive the super guarantee and you can nominate your preferred super fund to be paid into.
Salary sacrifice contributions
Some employers may offer a salary sacrifice or salary packaging arrangement where you can choose to ‘sacrifice’ part of your pre-tax salary and ask your employer to pay it directly into your super. Generally, it will be taxed at 15% instead of your marginal tax rate.
Learn more about the tax concessions of super contributions.
If you’re an Essential Super1 member and would like your employer contributions paid into your account, you can fill out a Super Choice form to provide to your employer. You’ll need your account number from your statement.
Don’t have your account number handy? Simply log into NetBank or the CommBank app and download the pre-filled SuperChoice form.
Non-concessional contributions refer to contributions that are funded by income that has already been taxed. They are also referred to as ‘after-tax’ contributions.
You may choose to make voluntary super contributions from your take-home pay. This can usually be done directly within your account. These earnings are taxed at only 15%, rather than your marginal tax rate. You may be able to claim a tax deduction on these contributions. It is important to note that when you claim tax deduction on a personal contribution, this amount claimed will then be counted towards your concessional contribution cap.
To claim or vary a tax deduction for personal super contributions, you will need to complete a notice of intent form and ensure you’ve met the eligibility criteria (including timeframes). For more information on when you should complete the notice of intent, please visit the ATO website.
Low income super tax offset (LISTO)
If you earn $37,000 or less a year, you may be eligible for a LISTO payment that is a government superannuation payment of up to $500 a year. Your super fund will need your tax file number (TFN) to accept a LISTO payment on your behalf. Check the eligibility criteria on the ATO website.
If you are an Essential Super member, you can check if your TFN has been provided on NetBank or in the CommBank app.
If you are a low or middle-income earner and have made after-tax contributions to your super, you may be eligible for a government co-contribution of up to $500 each year. If you’re eligible and your super fund has your TFN, this payment will be paid into your super account automatically. For more information on the eligibility criteria, please visit the ATO website.
Spouse contributions are after-tax payments that can be invested into your spouse’s super fund. If your spouse is not working or earns a low income, you may be eligible for a tax offset on these contributions. For more information on the eligibility criteria, please visit the ATO website.
Wondering how much extra you can contribute your super?
Caps apply to concessional and non-concessional contributions. Exceeding these caps can cause you to pay extra tax.
As at 1 July 2021, you can contribute up to $27,500 in concessional payments a year, inclusive of your SG contributions. Your personal concessional contribution cap may vary depending on factors such as the amounts you’ve contributed in previous years as well as your eligibility to access the carry forward concessional contribution arrangement. You can learn more about this on the ATO website.
As at 1 July 2021, your annual non-concessional cap is $110,000. Your personal non-concessional contribution cap may vary depending on factors such as the amounts you’ve contributed in previous years as well as your eligibility to access the bring forward arrangement. You can learn more about this on the ATO website.
Discover more frequently asked questions about super.