Key points:
- You can make an after-tax contribution to your super from your take home pay. These are called non-concessional contributions.
- You can contribute up to $120,000 each year in non-concessional contributions.
- You can claim a tax deduction on these contributions.
- There could be a benefit to making an after-tax contribution. These benefits depend on your personal circumstances.
- If you earn less than $60,400 before tax and contribute to your super, you could be eligible for a government co-contribution
- If you contribute to your spouse’ super account, you may be able to claim a tax offset.
- If you make a personal contribution, you could claim a tax deduction of up to $30,000, depending on your personal circumstances.
- You can make after-tax contributions to your super through the Aware Super app on your account online using BPAY®.
Benefits of adding to your super from your take-home pay
You can make after-tax contributions to your super from your take-home pay. This helps boost your super in addition to the contributions made by your employer. You may be able to claim a tax deduction. This is especially convenient if your employer doesn’t offer salary sacrifice or you are self-employed.
You can save on tax and grow your super through returns on your investments. The most you will pay on the money your super earns is 15%, while you could pay up to 47% tax on investment earnings outside super.
Types of non-concessional contributions
Non-concessional contributions are contributions you can make from your take-home pay. This is an after-tax contribution, because your employer would have already taken out the tax you need to pay on your income. You can also claim a tax deduction on these contributions. These contributions can include:
- contributions made from your take home pay
- cash in your bank account that you contribute to super
- proceeds from an inheritance
- proceeds from the sale of an investment property.
Understand how much you can contribute
There are limits on how much you can pay into your super fund each financial year without having to pay extra tax. These limits are called 'contribution caps'. You can contribute up to $120,000 each year in non-concessional contributions.
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.
Learn more about how much you can contribute to super, so you can make the most of the caps and maybe save on tax.
How super works
After tax contributions
Contributions made from money that has already been taxed
- Take home pay (after tax)
- Cash held outside super that is then contributed to super
- E.g. proceeds from an investment property sale or an inheritance
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Take advantage of extra non-concessional contributions
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. Find out more
How to claim a tax deduction for personal contributions
You can claim your after-tax personal contributions as a tax deduction if you meet certain criteria. Learn about claiming a deduction for super contributions.
Explore the benefits of paying extra super
The earlier you start adding to your super, the more it will be worth in years to come. Before you make a personal contribution, you should consider:
- your long-term financial goals
- how much you can afford to contribute and how far down the track you would like to withdraw your super. Are you planning on retiring soon, or do you want to contribute extra to your super now to help save for your first home?
There are other ways to grow your super to help fund your retirement savings. You can:
- change your investment strategy, or
- add more to your super through before-tax contributions such as salary sacrifice.
Use our super retirement calculator to see how much you can grow your super with personal contributions.
View more of helpful our How to videos.
How to stay on top of your contributions
There are some ways to make sure you’re not going over the contributions cap.
- If you know how much super you get every year, you can work out how much extra you can pay before reaching the cap.
- Check how much you’ve contributed for the year by logging on to your account online
This way, you know how much money has already gone into your cap and can work out how much is left for you to contribute.
Things to consider
- If you make a personal contribution to your super and withdraw it before you claim a deduction, it will reduce the amount you can claim as a tax deduction.
- There are rules around when you can withdraw your super. Find out more about when you can withdraw your super
Where to next?
Contribution caps
There are limits, or 'caps', on how much you can contribute to your super each year. If you go over the cap, you could end up paying more in tax.
Before-tax contributions
Making a before-tax contribution to your super can help you boost your super balance and save on tax.
Attend an event – Making the most of your super
This series aims to help you understand your super and how to make the most of it to reach your retirement goals.
