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Contributing to Super

Making additional contributions into your super, on top of your superannuation guarantee contributions (employer contributions) can really boost your retirement income.

There are a number of easy ways that you can make additional contributions to your super account including:

Salary sacrifice contributions

Salary sacrifice is an arrangement between you and your employer, whereby you agree to forgo part of your before-tax salary and contribute it to your super. If you make super contributions through a salary sacrifice arrangement, these contributions are taxed in the super fund at a maximum rate of 15%. Generally, this amount of tax is less than what you would pay if you did not enter into a salary sacrifice agreement and instead were subject to PAYG withholding tax on your earnings.

However, the concessional tax treatment is limited to a set amount of contributions made each income year. The concessional contributions cap is $27,500 per annum regardless of age. This amount is the total of all before tax contributions and is indexed each year.

Where concessional contributions exceed these caps, excess concessional contributions tax is payable at a rate of 31.5% (this is on top of the 15% tax already paid by the fund). Excess concessional contributions tax is payable by the individual.

To avoid paying a higher rate of tax on your super contributions, you should ensure that your salary sacrificed amount and any other concessional contributions to your super fund, such as additional employer super guarantee payments or employer payments above the super guarantee, do not exceed the cap amount.

Salary sacrifice is available at your employer’s discretion, so you will need to check to see if it is available.

Member voluntary contributions

Member voluntary contributions are non-concessional contributions. They are paid out of your after-tax salary and are therefore not taxed when deposited into your super account nor taxed if you withdraw your super benefit as cash when you retire.

Making voluntary contributions can really boost your super for retirement. There are many ways in which you can make voluntary contributions including:

  • Lump sum contributions each year
  • Payroll deductions
  • Regular monthly contributions – similar to a savings plan
  • Anytime that best suits you

It is important to remember the amount of member voluntary contributions you make in a financial year without being subject to additional tax is capped, subject to the ‘bring forward’ rule explained below. The following table outlines what cap applies to you:

AgeMember Voluntary CapBring forward option
Up to age 65 years$110,000*$330,000 in any 3 year period*^
65 to 74$110,000 subject to meeting the work test*N/A

*Subject to the ‘General Transfer Balance Cap’ rule which requires your total superannuation balance to be less than this cap at the end of 30 June of the previous financial year ($1.7 million for the 2021-22 financial year).

^To access the ‘bring forward’ provision in the 2021-22 financial year, you must have a total superannuation balance less than $1.7 million at the end of 30 June 2022, or $1.59 million to bring forward over a two year period. Please refer to the table below.

Total superannuation balance on 30 June of previous yearNon-concessional contributions cap for the first year Bring-forward period
Less than $1.48 million$330,0003 years
$1.48 million to less than $1.59 million$220,0002 years
$1.59 million to less than $1.7 million$110,000No bring-forward period, general non-concessional contributions cap applies
$1.7 million or moreNilNot applicable

Bring forward option

If you are under age 65 in a particular financial year, you will be able to ‘bring forward’ future entitlements to two years’ worth of non-concessional contributions. This means, for example, that a person under age 65 would be able to contribute voluntary after-tax contributions totalling up to $330,000 in one financial year without exceeding their voluntary after-tax contribution cap. Though once this limit is reached you could not contribute again until the three-year period has ended.

If you are aged 65 years or over, you will not be able to ‘bring forward’ your entitlements to make non-concessional contributions. Accordingly, if you are aged 65 to 74, you will have a non-concessional contributions cap of $110,000 for each financial year, provided you meet the ‘work test’ for each year a contribution is made. This test requires that you work 40 hours in a continuous 30-day period during the financial year.

Once you reach age 75, you are generally ineligible to make voluntary contributions into your super (except for downsizer contributions**).

**If you are 65 years old or older and meet the eligibility requirements, you may be able to make a downsizer contribution into your superannuation of up to $300,000 from the proceeds of selling your home.

Government co-contributions

If you’re a low or middle-income earner, you can boost your super savings by taking advantage of the co-contribution payment from the government. This means the government will match your personal super contributions.

You may be eligible for the co-contribution if:

  • You make an eligible personal super contribution by 30 June each year
  • Your total income is less than the higher income threshold of $56,112
  • 10% or more of your total income is from eligible employment, running a business or a combination of both
  • You are less than 71 years old at the end of the year of income
  • You do not hold an eligible temporary resident visa at any time during the year
  • You lodge your income tax return for the relevant income year
  • Your total superannuation balance must be less than $1.6 million on 30 June of the year before the year the contributions are being made
  • You must not exceed your non-concessional contributions cap in the relevant financial year

The amount of co-contribution for which you’re eligible depends on your income. If your income is equal to or less than the lower income threshold, you’re eligible for a full co-contribution. Above this income, the co-contribution reduces, until it cuts out at the higher income threshold.

DateLower Income ThresholdHigher Income ThresholdWhat is my maximum entitlement?
From 1 July 2021$41,112$56,112The maximum payment you can receive for a financial year is $500, and the minimum is $10. If you're eligible for less than $10, the ATO rounds this up to $10.

Spouse contributions

If you have a spouse, you can make spouse contributions on their behalf. Spouse contributions (up to a maximum of $3,000) currently receive an 18% tax offset to the contributing spouse if the eligibility criteria are met. The super contributions put into a spouse’s account will also be tax-free when withdrawn at retirement.

For you to be eligible for a tax offset:

  • The sum of your spouse’s assessable income, total reportable fringe benefits amounts and reportable employer superannuation contributions was less than $40,000
  • The contributions you made on behalf of your spouse were not deductible to you
  • The person was your spouse when you made the contribution
  • Both you and your spouse were Australian residents when you made the contribution
  • You and your spouse were not living separately and apart on a permanent basis when you made the contributions, and
  • Your spouse did not have
    • Non-concessional contributions totalling more than their non-concessional contributions cap for 2020–21, or
    • At 30 June 2020, a total superannuation balance of $1.6 million or more.

No offset is available to you if your spouse earns more than $40,000. The maximum amount of offset available in a financial year is $540.

If your spouse does not have an account with Freedom of Choice Super, they can join and receive the same great features and benefits that you do.

More information

For more information, please refer to the Australian Taxation Office (ATO) website. Click here to visit their site.

Important note

The information provided here should not form the basis for any action that you take. It is important to first discuss your personal circumstances with your financial adviser.

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