Written by:
Erin Truscott
Senior Financial Adviser
When it comes to building wealth for retirement, super contributions remain one of the most effective tools available to Australians. Thanks to favourable tax treatment and government incentives, contributing to super can help you grow your savings faster — but only if it’s done right.
With changes to contribution caps, income thresholds and tax rules, 2025 is shaping up to be a year where it really pays to stay informed. Whether you’re making personal contributions, receiving employer payments, or considering a voluntary top-up, knowing the rules can help you avoid costly mistakes and take advantage of every opportunity.
This guide breaks down the key types of Australian super contributions, the current limits, and what to consider before you contribute to super — especially if you’re looking to boost your balance and reduce your tax bill along the way.
Everyone’s situation is different, so if you’re not sure how contributing to super fits into your financial plan, it’s worth speaking with a professional. Getting superannuation advice now can make a big difference later.
These are the compulsory super contributions your employer makes on your behalf — also known as the Super Guarantee. As of 1 July 2025, the rate is 12% of your ordinary earnings. These contributions are classified as mandated super contributions and count toward your concessional cap (more on that later).
Plus, these days, there’s no minimum super contribution threshold. As of 1 July 2022, employers must pay super on all ordinary earnings.
These are contributions you make from your own money — either from pre-tax income (claimed as a deduction) or after-tax income. Depending on how you structure them, they can be classified as:
If you claim a tax deduction for them, they’ll be reported as reportable super contributions on your tax return and counted toward your concessional cap.
Voluntary contributions are made at your discretion — either pre-tax via salary sacrifice or from your take-home pay. You can also contribute to your spouse’s super, which may help reduce your overall tax and grow your combined retirement savings.
If you’re 55 or older and sell your home, you may be able to contribute up to $300,000 to your super from the sale proceeds — this is called a downsizer contribution and doesn’t count toward the usual contribution caps.
While most Australians receive employer super contributions as part of their salary package, relying on these alone may not be enough to achieve the kind of retirement lifestyle you’re aiming for.
Making extra contributions — either from pre-tax income (concessional) or after-tax income (non-concessional) — can be a smart way to grow your super faster, reduce your tax, or take advantage of government incentives.
You’ve received a tax refund or work bonus and want to put that money to good use. By making a personal after-tax contribution, you may be eligible for the government’s super co-contribution — up to $500 in extra contributions, depending on your income.
You’re on a higher income and looking to reduce your taxable income. By salary sacrificing a portion of your salary or claiming a deduction for a personal super contribution, you may lower your income tax while increasing your retirement savings — a win-win.
As retirement nears, many people realise they may need to top up their super to close the gap between what they have and what they’ll need. Using carry-forward concessional contributions or the bring-forward rule for after-tax contributions can help you catch up.
As you can see, there are a few options, and everyone’s situation is different. That’s why it’s worth reviewing your options regularly — especially if your income, expenses or retirement goals have changed. A tailored strategy can make sure your extra contributions are working hard for you.
Concessional super contributions are contributions made into your super fund from income that hasn’t yet been taxed. These are taxed at a flat rate of 15% when received by your fund — which is often lower than your personal income tax rate.
These contributions are capped annually, and going over the limit can result in additional tax and reporting requirements.
There are three main types of concessional contributions:
If your income is over $250,000, you may also be subject to an additional 15% tax (known as Division 293 tax), bringing the total to 30% on some or all of your concessional contributions.
The annual concessional contributions cap for 2025–26 is $30,000. This includes:
If your total concessional contributions exceed the cap, the excess is added to your taxable income and taxed at your marginal rate. You may also need to pay an interest charge.
If you don’t have a salary sacrifice arrangement, you can still make a personal super contribution from your after-tax income and claim a deduction to reduce your taxable income.
To do this correctly, you must submit a ‘Notice of intent to claim a deduction’ to your super fund and receive an acknowledgment — ideally before lodging your tax return. This step ensures the contribution is classified properly by the ATO.
When considering salary sacrifice super vs voluntary contribution strategies, it comes down to timing and control:
Both options are treated as concessional contributions if set up or claimed correctly. Choosing the right one depends on your cash flow, employment structure, and how close you are to the annual cap.
These strategies can be highly effective, but timing and structure matter. If you’re unsure how to make the most of your super concessional contributions, professional advice can help you stay within the rules and get the most value for your situation.
Each financial year, the government sets limits — called super contribution caps — on how much you can add to your superannuation without paying extra tax. These caps are important to understand if you’re making contributions beyond what your employer provides.
The concessional contributions cap for 2025–26 is $30,000. This covers all pre-tax super contributions, including:
If you go over this limit, the excess amount is added to your taxable income and taxed at your marginal rate. You might also be liable for an excess contributions charge.
If you didn’t use your full concessional cap in previous years, you can carry forward unused cap amounts for up to five years. This is a useful strategy to catch up on super if your income has recently increased or you’ve returned to the workforce.
The non-concessional contributions cap for 2025–26 is $120,000 per year. These are after-tax contributions that you don’t claim as a deduction.
If you’re under 75 and meet the criteria, you may be able to bring-forward up to three years’ worth of contributions. This is known as the bring-forward rule.
Important: if your total super balance is close to $1.9 million, your ability to make non-concessional contributions may be reduced or removed altogether. It’s worth checking before making a large deposit.
Your maximum super contribution depends on your situation and the type of contributions you’re making. Here’s a general guide:
In some cases, such as with downsizer contributions (covered later), you may also be able to contribute additional amounts that don’t count toward these caps.
We can help you understand how extra contributions fit into your overall retirement strategy — so you can grow your balance and save tax with confidence.
Book a no-cost consultation to get personalised advice tailored to you.
If you’re on a lower income — or your partner is — there are a couple of lesser-known super strategies that can help grow your balance while also providing tax or cash-flow benefits. These include the super co-contribution for eligible individuals, and the spouse super contribution tax offset for couples.
If you earn under a certain threshold and make a personal after-tax contribution to your super, the government may contribute up to $500 to your super account — essentially a top-up to reward saving for retirement.
The government super co-contribution is one of the simplest and most generous incentives available for low- and middle-income earners — but it’s often overlooked. If you’re not sure whether you’re eligible for the govt super co contribution, a quick check can go a long way.
If your partner earns a low or modest income, making a spouse super contribution could benefit both of you. You can contribute into their super fund and potentially receive a tax offset.
These super spouse contribution strategies are especially useful for couples where one person is working part-time, caring for children, or taking a career break. Over time, they can help reduce the retirement savings gap — and the tax offset is a nice bonus.
Not sure if you’re eligible for the co contribution super or the spouse super contribution tax offset? It’s worth checking — or getting advice to make sure you’re making the most of what’s available.
Understanding how tax applies to your super contributions can help you avoid unexpected costs and make better use of the system. Whether you’re making personal contributions or receiving payments from your employer, it’s important to know which contributions are taxable super contributions and how they’re treated.
Concessional contributions — such as employer super contributions, salary sacrifice amounts, and personal contributions claimed as a deduction — are taxed at a flat rate of 15% when they enter your fund. This is often referred to as the super contribution tax or contributions tax on super.
If your income is over $250,000, you may also be subject to an additional 15% tax on some or all of your concessional contributions. This is known as Division 293 tax and brings the total tax on affected contributions to 30%.
Non-concessional contributions — those made from after-tax income without claiming a deduction — are not taxed when they enter your fund. However, they don’t reduce your taxable income and must stay within the annual cap to avoid penalties.
If you exceed the annual cap for either type of contribution, the excess may be taxed at your marginal tax rate. You may also need to lodge additional paperwork and pay interest charges — so it’s worth tracking your contributions across all your funds.
Many people ask, “Why am I paying contribution tax on my super?” Most of the time, it’s due to one of the following:
If you’re making personal contributions and claiming a deduction, it’s important to submit a valid notice of intent to your fund. This ensures your contribution is treated as a taxable super contribution and taxed at the concessional 15% rate — rather than being counted as a non-concessional contribution.
Claiming tax deductions for super contributions can be a valuable strategy, but the timing and paperwork must be done correctly to avoid issues with the ATO.
Still unsure what is super contributions tax or how it applies to your situation? Speaking with a professional can help clarify the rules and avoid unintentional tax penalties.
If you’re thinking about topping up your super, one of the first things to understand is how much you’re actually allowed to contribute — and what strategy might suit your situation best. The answer depends on a few things, like your income, super balance, and whether you’re contributing before or after tax.
In 2025–26, you can contribute:
If you’re eligible, you may also be able to contribute up to $360,000 in one go by using the bring-forward rule.
Not everyone needs to max out their contributions — but even small, regular top-ups can make a difference over time. The right approach depends on your age, goals, and available cash flow. Here are a few examples:
This is one of the most common questions people ask — and the answer is, “It depends.” Factors like your retirement target, investment strategy, and tax position all come into play. Even a modest increase, like putting in an extra $50–$100 per fortnight, can add up over time.
A super contributions calculator or a super contribution optimiser can give you a rough idea of how much you can contribute before hitting the caps — and what effect that might have over time. These are great for quick estimates, but they won’t replace tailored advice.
Not sure how much you can contribute to super this year — or what impact it could have? This is where a quick conversation with a financial adviser can help you avoid over-contributing and make your extra payments count.
If you’re aged 55 or over and sell your family home, you may be eligible to contribute up to $300,000 (per person) into super — without it counting toward your usual contribution caps. This is known as a downsizer super contribution.
It’s a great option for those who are downsizing their home and want to shift some of that equity into their retirement fund. And unlike most contribution types, there’s no upper age limit and no work test.
There are eligibility rules to meet, and timing is critical. For a more detailed guide, you can read our full article on the downsizer contribution here.
If you’re over 60 and have access to a significant amount of money — such as from an inheritance, property sale, or business exit — making a large lump sum super contribution can be a smart move. Depending on the source of funds and how you contribute, this may be treated as a non-concessional contribution or a downsizer contribution.
Getting the structure right is key. Large contributions can quickly eat into your cap space — or trigger unexpected tax if you’re not eligible for the downsizer option.
There’s no one-size-fits-all answer when it comes to super contributions. Your age, income, and goals all play a role in shaping the right strategy — and what works for someone else may not be right for you.
For many Australians, a mix of employer contributions, salary sacrifice, and occasional top-ups provides the best balance between tax savings and growing their super over time.
Whatever you decide, make sure it’s a strategy chosen for the right reasons — not just because “it’s what everyone else is doing.”
Deciding how and when to contribute to super isn’t always straightforward — especially with so many rules, caps, and options to weigh up. That’s where clear, personalised advice makes all the difference.
Whether you’re just getting started, wondering how much extra to contribute, or planning for retirement, we’re here to help you move forward with confidence and a strategy that fits.
The contribution limits depend on the type of contribution you’re making:
Tip: Going over these limits can result in extra tax. Use a super contributions calculator or get advice to avoid breaching your cap.
Concessional super contributions are taxed at 15% when they enter your fund. If your income is over $250,000, an additional 15% tax (Division 293 tax) may also apply.
Non-concessional contributions aren’t taxed (as you’ve already paid income tax on them).
Why am I paying contribution tax on my super? Most people pay this on pre-tax contributions, but if you exceed your cap, you may be charged extra tax.
This depends on your income, age, and retirement goals. Small, regular extra super contributions can grow significantly over time thanks to compounding.
The downsizer super contribution allows people aged 55+ to contribute up to $300,000 from the sale of their home into super, outside the usual caps.
No work test or age limit applies for this contribution. You must meet eligibility criteria and contribute within 90 days of settlement.
Want to know more? Read our detailed guide to downsizer contributions here.
Yes. If you’re over 60 and retired or meeting a condition of release, you can make lump sum super contributions to boost your retirement savings.
Absolutely. Contribution caps, tax rules and eligibility criteria can be complex, and mistakes can be costly.
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This is a publication of Direct Wealth Pty Ltd, a wholly owned subsidiary of Direct Wealth Group Pty Ltd.
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