Super is generally taxed at a lower rate than other investments. Making extra contributions can be a great way to grow your balance and could reduce your tax. But there are limits to the amount of super you can contribute each year. Going over the limit may mean paying extra tax.
This table below shows you the contribution cap limits to your super.
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| Contribution type | Contribution cap for each financial year |
|---|---|
Concessional contributions These contributions include:
|
$30,000 |
Non-concessional contributions These contributions can include:
|
$120,000 |
Adding to your super with before-tax contributions can help to reduce the tax you pay. You can contribute up to $30,000 each year.
These are contributions you have not paid any personal income tax on.
They are called ‘concessional contributions’ because the concessional rate of tax paid on super is 15%.
This is less than the lowest income tax rate of 16% (if you earn more than $18,200 per year).
If you haven't met the contribution cap of $30,000 in a financial year, you can carry the unused amount to the next year.1
This lets you take even more advantage of the low tax rates for super contributions.
1 You can carry forward any unused amounts from up to 5 previous financial years starting from the 2018/19 financial year and afterwards.
Your total super balance must be less than $500,000 at 30 June before the year in which you wish to make the extra contribution. To learn more about how this works, the ATO has some helpful information you can view here. You can check your own personal contribution cap and any unused amounts on MyGov.
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For example:
Katarina made $15,000 in concessional contributions in the financial year 2023/2024. This was a combination of her employer contributions and salary sacrifice. She has $12,500 of unused cap space she can carry forward to the next financial year.
Katarina would like to take advantage of her unused concessional cap. This is a way for her to add more to her super to help her balance grow in the longer term.
Katarina could contribute up to $42,500 ($30,000 + $12,500) to her super account by 30 June 2025. This is only possible if her super balance was below $500,000 on 30 June 2024.
Another way to add to your super is to deposit money after your income has been taxed. You can contribute up to $120,000 each year.
Add money to your super after tax
An after-tax contribution is also known as a ‘non-concessional contribution’. These are made from your take-home pay. These are contributions where tax has already been paid.
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A special rule enables you to ‘bring forward’ up to three years' worth of contributions.
If you are under 75, you may make up to three years' worth of extra non-concessional contributions in a single year. This means you ‘bring forward’ your non-concessional cap up to two financial years. This allows you to contribute up to $360,000 in one financial year.
To access the bring forward arrangement in 2024/25:
The following table shows the bring-forward arrangement for the first year:
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| Total super balance on 30 June of previous year | Non-concessional contributions cap for the first year | Bring-forward period |
|---|---|---|
| Less than $1.66 million | $360,000 | 3 years |
| $1.66 million to less than $1.78 million | $240,000 | 2 years |
| $1.78 million to less than $1.9 million | $120,000 | No bring-forward period, general non-concessional contributions cap applies |
| $1.9 million or more | nil | Not applicable |
If you contribute $360,000 in one financial year, you'll need to wait two financial years to contribute more.
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All your contributions are grouped by the type of contribution, in each financial year. Even if you have more than one super fund, all your contributions are added up and count towards your caps. If you go over these caps, you may need to pay extra tax.
If you know about your own contribution caps, you can make the most of the caps. If you do contribute more than you intended to, there are some options for you to consider.
If you go over your cap in a financial year, you have two options on how your excess contributions are taxed.
You can withdraw the excess non-concessional contributions. You will also need to withdraw 85% of the associated earnings on the excess contributions. Tax is payable on the associated earnings, or
You can leave the excess contribut.ions in your super. You are liable to pay excess contributions tax on the excess contributions. The tax on the excess contributions is 47%
The excess contributions will be taxed at your marginal tax rate, plus Medicare levy, less a tax offset of 15%. You have the option to withdraw up to 85% of your excess contribution to help pay your income tax liability.
If you decide not to release your excess contrbutions, it will count towards your non-concessional cap and you could be taxed up to 94%. You need to be mindful of this.
Things to consider
If you make an after-tax contribution, you can then claim a tax deduction on this amount in your tax return. Depending on the amount you claim as a tax deduction this will now form a part of your concessional contributions.
The annual concessional contribution cap is $30,000. This includes contributions made by your employer. If you go over this amount you may will have to pay extra tax, unless you have unused cap space from previous years.
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