Superannuation Contribution Strategies to Reduce Tax

Smart super strategies that can significantly reduce your tax bill while building your retirement savings.

Concessional (Before-Tax) Contributions

Concessional contributions are made from pre-tax income and taxed at just 15% inside super — much lower than most people's marginal tax rate. The annual cap is $30,000. Types include employer SG contributions, salary sacrifice contributions, and personal deductible contributions. If you earn $120,000 and salary sacrifice $10,000 into super, you save the difference between your marginal rate (37% + 2% Medicare) and the 15% super tax — a saving of $2,400.

Salary Sacrifice

Salary sacrifice means asking your employer to redirect part of your pre-tax salary into super. The amount sacrificed is taxed at 15% instead of your marginal rate. To set this up, speak to your employer or payroll department. Ensure total concessional contributions (including employer SG) don't exceed the $30,000 cap.

Personal Deductible Contributions

If you're self-employed or your employer doesn't offer salary sacrifice, you can make personal contributions to your super fund and claim a tax deduction. You must submit a "Notice of Intent to Claim" form to your super fund before lodging your tax return or before the end of the financial year following the contribution.

Carry-Forward (Catch-Up) Contributions

If you haven't used your full $30,000 concessional cap in previous years, you may be able to carry forward unused amounts for up to five years. This is available if your total super balance is under $500,000 at 30 June of the previous year. It's a powerful strategy for people who've had years of lower contributions.

Non-Concessional (After-Tax) Contributions

These are contributions from after-tax money. They're not tax-deductible, but the investment earnings inside super are taxed at a maximum of 15%. The annual cap is $120,000 (or $360,000 using the bring-forward rule over three years). This strategy is useful for building super if you've already maximised your concessional contributions.

Spouse Contributions

If your spouse earns less than $40,000, you may be eligible for a tax offset of up to $540 by contributing to their super. The maximum offset applies when you contribute $3,000 and your spouse's income is $37,000 or less.

Government Co-Contribution

If you earn less than $58,445 and make a personal (after-tax) super contribution, the government may contribute up to $500 to your super. The maximum co-contribution applies if you earn $43,445 or less and contribute at least $1,000.

Want a Personalised Super Strategy?

The right contribution strategy depends on your income, age, and retirement goals. We can model different scenarios and recommend the approach that saves you the most tax.