Turbocharge your Super before June 30

The months leading up to 30 June provide a valuable opportunity to review your superannuation balance and explore ways to boost your retirement savings.

Making additional contributions (on top of any super guarantee paid by an employer) could make a big difference to your retirement balance thanks to the magic of compounding interest. Here’s how:

Concessional contributions (before tax)

These contributions can be made from either your pre-tax salary via a salary-sacrifice arrangement through your employer or using after-tax money and depositing funds directly into your super account.

Apart from the increase to your super balance, you may pay less tax (depending on your current marginal rate).ⁱⁱ

Check to see what your current year to date contributions are so any additional contributions you may make don’t exceed the concessional (before-tax) contributions cap, which is $30,000 from 1 July 2024.ⁱⁱⁱ

Non-concessional contributions (after tax)

This type of contribution is also known as a personal contribution. It is important not to exceed the cap on contributions, which is set at $120,000 from 1 July 2024.^iv

If you exceed the concessional contributions cap (before tax) of $30,000 per annum, any additional contributions made are taxed at your marginal tax rate less a 15 per cent tax offset to account for the contributions tax already paid by your super fund.

Exceeding the non-concessional contributions cap will see a tax of 47 per cent levied on the excess contributions.

Carry forward (catch-up) concessional contributions

If you’ve had a break from work or haven’t reached the maximum contributions cap for the past five years, this type of super contribution could help boost your balance – especially if you’ve received a lump sum of money like a work bonus.

These contributions are unused concessional contributions from the previous five financial years and only available to those whose super accounts are less than $500,000.

There are strict rules around this type of contribution, and they can be complex so it’s important to get advice before making a catch-up contribution.

Downsizer contributions

If you are over 55 years, have owned your home for 10 years and are looking to sell, you may be able to make a non-concessional super contribution of as much as $300,000 per person – $600,000 if you are a couple. You must make the contribution to your super within 90 days of receiving the proceeds of the sale of your home.

Spouse contributions

There are two ways you can make spouse super contributions. You could:

• split contributions you have already made to your own super, by rolling them over to your spouse’s super – known as a contributions-splitting super benefit, or
• contribute directly to your spouse’s super, treated as their non-concessional contribution, which may entitle you to a tax offset of $540 per year if they earn less than $40,000 per annum

Again, there are a few restrictions and eligibility requirements for this type of contribution.

Looking to update your Superannuation Strategy? Get in touch.

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_{This article is general in nature and has not been tailored to individual circumstances. Before acting on this information, you should assess your own circumstances or seek personal advice from a licensed financial adviser. This article is current as at the date of issue but may be subject to change or be superseded by future publications. While it is believed that the information is accurate and reliable, the accuracy of that information is not guaranteed in any way. Past performance is not a reliable indicator of future performance, and it should not be relied on for any investment decision. Whilst care has been taken in preparing the content, no liability is accepted by the Licensee nor any of its agents, employees or related bodies corporate for any errors or omissions in this publication, and/or losses or liabilities arising from any reliance on this information.}

i Transferring or consolidating your super | Australian Taxation Office
ii Salary sacrificing super | Australian Taxation Office
iii Concessional contributions cap | Australian Taxation Office
iv Non-concessional contributions cap | Australian Taxation Office