Skip to main content

We use cookies to better deliver personalised content. Read about how it works.

We’re here to support you if you’ve been affected by the ongoing bushfire crisis. For more information, you can head to our support page.

Search aware.com.au

Suggestions

Grow your super for retirement

Retire couple laughing

Top up your retirement savings

With salary sacrifice you can contribute more to your retirement savings. You can ask your employer to set your salary sacrifice up for you. Your employer re-directs some of your take home pay into your super account.[S1] Salary sacrifice is a way to grow your super savings and at the same time, potentially reduce your taxable income.[S2]

Salary sacrifice can mean more super and less tax

You choose an extra amount you’d like your employer to pay into your super. It can be a percentage or a set dollar amount of your before-tax pay. The benefit of salary sacrifice include: 

  • Pay less tax (the 15% contributions tax in super might be lower than your marginal tax rate) 
  • Reduce your taxable income 
  • More super means more compounding interest (investment returns earned on your investment).

Before you get started, check out the limits on how much you can contribute to your super fund each financial year. 

 

Did you know?
Salary sacrifice contributions are taxed at 15%, compared to the tax on your take-home pay, which can be up to 45%.[S1]
Learn more about salary sacrifice

Top up your super with after-tax contributions

There are a few different types of contributions that can help grow your super for retirement: 

  • If you earn less than $62,488 in the 2025-26 financial year you could be eligible for a government co-contribution of up to $500 when you make a personal after-tax contribution.[S3]
  • Make contributions on behalf of your spouse and you may receive a tax offset.^
  • If you make a personal contributionto your super from your take-home pay you may even be able to claim your contributions as a tax deduction.
  • If you are over 55 you may be able to take advantage of downsizer contributions.^

^Eligibility criteria applies.

Downsizer contributions

The downsizer contribution helps Australians over 55 boost their super when they sell their home. 

If you sell your primary residence, you may be able to contribute up to $300,000 for singles and $600,000 for couples into your super. Downsizer contributions do not count towards your after-tax contribution cap and there may be tax advantages  – it can be a great way to get some extra money saved for retirement. 

It’s all part of the government’s plan to help older Australians while freeing up larger homes for young families. However, you don’t have to literally downsize and buy a smaller home to qualify. 

You do need to be 55 or over and have owned your home for at least 10 years. And there are some other rules that apply.  

Find out more about downsizer contributions.

Case study for downsizer contributions

  • Contributions of $100,000 and $300,000 are based on a single female, making a downsizer contribution at age 55 and retire at age 67.
  • Contributions of $600,000 are based on a couple (male and female), making a downsizer contribution at age 55 and retire at age 67. Each member will contribute $300,000 into their super.
  • Extra incomes are rounded to the nearest $100 and are stated in today’s dollars deflated using Average Weekly Ordinary Time Earnings (AWOTE) of 3.5% p.a. in accumulation phase and CPI of 2.50% p.a. in pension phase.
  • The downsizer contribution is made at age 55 and invested in the Aware Super MySuper Life Cycle option, assumed to be CPI + 4% until age 55, reducing from CPI + 4% to CPI + 2.75% between the ages 55-65 (inclusive) and CPI + 2.75% from age 65 onwards.
  • Starting from age 67 at retirement, the single and couple started an income stream which is invested in the Conservative Balanced (pension) option. The assumed return is CPI + 3.25% p.a net of all taxes, investment, and admin fees.
  • Starting from age 67 at retirement, the single and couple will both attempt to maximise their income until age 95.
  • The female member has a starting salary of $80,000 and a starting balance of $126,000
  • The male member has a starting salary of $102,000 and starting balance of $164,000
  • Age pension and asset and income test thresholds are valid as at 1st July 2024.

Feel confident you have enough super to retire

Worried you won't have enough super to fund your retirement? There are always options.

  • Working out how much you’ll need to retire can help you feel more confident about your savings goals. The amount you need for retirement will depend on the kind of lifestyle you want once you stop working.
  • Delaying retirement or scaling back to part-time work can help you keep saving before you access your super.
  • You may be eligible for the Age Pension, which can work alongside your super savings to fund your retirement.
Get the retirement you've earned        
We'll help you set up for retirement.
Super calculator Get the retirement guide

FAQ

Salary sacrifice is when you choose an extra amount you’d like your employer to pay into your super. It can be a percentage or a set dollar amount of your before-tax pay. This is in addition to the compulsory superannuation guarantee (SG) that your employer must pay directly into your super.

This allows you to grow your super savings and reduce your taxable income.

A non-concessional or after-tax contribution is extra money you contribute that you’ve already paid tax on. It might come from your take-home pay, savings or a windfall.

A contribution to super that anyone over the age of 55 can consider after selling their home. You may contribute some or all the proceeds into your super account (how much depends on your circumstances). You don’t have to pay tax on a downsizer contribution. Find out more about downsizer contributions.

Most people can make salary sacrifice contributions until the age of 75, and most employers offer a salary sacrifice option. It’s important to get advice to make sure salary sacrifice is a good option for your own personal situation.

Salary sacrificing is one way to make a difference to your financial position when you retire.

See how $10 a week can mean more money in retirement

There are limits on how much you can contribute each year, called contribution caps. Go over the cap, and you may have to pay extra tax.

The pros include building your super for retirement, while potentially saving on tax. The cons are that you reduce your take-home pay and you have to be careful not to exceed the before and after-tax contribution caps. There are also rules around when you can withdraw your super.

It’s important to consider if contributions are right for your situation.

You need to be 55 or over and have owned your home for at least 10 years. And there are some other rules that apply.

Downsizer contributions are added to your super balance, which is included in the assets and income test – so yes, it could impact your eligibility. It’s important to get advice on how it could affect your situation.

Where to next?

Attend a retirement webinar

Join our experts as they break down super and finances into easy-to-understand topics through our live webinar education series.
Explore retirement topics

Retirement pay days set up for you

We'll help you turn your super into a regular income when you retire. Keep getting paid and keep investing your savings.
Retirement Income account

Learn with Aware Super

No matter where you’re starting from, we’ve got expert insights and tools to help you set up for retirement.
Visit Learn

[S1] Understand the super contributions that can work for you”: Before contributing, consider the relevant superannuation thresholds, including the current annual limit for all before-tax and after-tax contributions. Exceeding any of these thresholds may reduce any tax benefits you could receive. Visit Grow your super.

[S2] Salary sacrifice will save tax in many but not all circumstances and will cause a reduction in your take home pay.

[S3] Check your eligibility for the government's super co-contribution before acting on this information.