Strategies to Grow Your Super Contributions

Superannuation funds and super contributions form a strong foundation for life after retirement. If your super contributions are well managed, you can not only save taxes but also save more for your retirement. As complicated as the super system can seem, ultimately there are two types of super contributions, pre-tax and after-tax.

Before-tax (concessional) contributions: These are contributions added to your super account before your income tax has been deducted. These are generally taxed at 15% when added your super account, instead of your marginal income tax rate, which can be as high as 47% (including Medicare).

After-tax contributions: The other alternative is to pay into your super fund from your after-tax salary. These super contributions are termed non-concessional as taxes have already been paid on your funds, and no tax is deducted when added to your fund.

Five of the more common super contributions to consider before June 30 include:

  1. Salary sacrifice and one-off contributions

Consider making additional contributions to your super account, either from pre-tax salary as salary sacrifice or from after-tax salary as one-off contributions. Both methods add to your post-retirement savings and can be tax advantageous. Your monthly take-home salary reduces, but your savings in your super account rises. If you hadn’t set that up for this year but think you may want to for next, speak with an Adviser to understand the impacts of that choice and then work with your employer.

  1. Government Co-Contribution

In order to encourage low- to middle-income earners to boost their retirement savings, the government offers a super co-contribution. If you expect your income to be less than $41,112 this financial year, you might benefit by making an after-tax contribution.  The maximum government payment is $500 and phases out until your income is above $56,112.

  1. Super Contributions on Behalf of Spouse

If your spouse earns less than $37,000, you can make a super contribution to their super account to boost their retirement savings and earn a tax deduction for yourself. Super contributions of up to $3,000 into a spouse’s account can earn tax benefits of up to $540 (partial payment if between $37,000 and $40,000). Additionally, you may also submit a request to split your super contributions with your spouse to even up any significant balance differences.

  1. Downsizer Contributions

People aged 65 and over can make a voluntary contribution to their super of up to $300,000 using the proceeds from the sale of their home (if it’s their main residence) – regardless of their work status, super balance, or contributions history.

For couples, both people can take advantage of this opportunity, which means up to $600,000 per couple can be contributed toward super.

  1. Contribution from savings

Another way to invest more in your super is with some of your after-tax income or savings, by making a personal non-concessional contribution. Although these contributions don’t reduce your taxable income for the year, you can still benefit from the low tax rate of up to 15% that’s paid in super on investment earnings. This tax rate may be lower than what you’d pay if you held the money in other investments outside super.


You will need to meet certain eligibility conditions before benefiting from the above super contributions.

If you’re thinking about making a contribution before June 30 now is a great time to act to avoid last minute stress and to maximise your tax benefits. Contact your adviser to help decide what is most appropriate for you.


Craig Kirkwood AFP® | M.FF

Authorised Representative (No 401525)

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Financial Planner AFP® | M.FF

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