Making superannuation contributions: Super for beginners guide

While your employer’s compulsory Super Guarantee (SG) contributions provide some level of financial security in retirement, if you are relying on this alone, you may risk not having enough super to enjoy your retirement.

A solution is to boost your super account by making extra contributions yourself.

Two basic things you need to know about Super contributions:

1. It’s all about the tax

The key to understanding different types of super contributions is to remember it’s all about the tax that you pay.

There are two main types of super contributions:

• Concessional (before tax) or tax-deductible contributions
• Non-concessional (after tax) or personal contributions

2. There are annual caps on your contributions

The government has strict annual caps or limits on both your concessional (before tax) and non-concessional (after tax) contributions into your super.

The caps are indexed and any contributions you make over these annual limits are subject to extra tax.

Concessional (before tax) super contributions: 5 main types 

There is a 15% contributions tax payable on all concessional contributions when they are added to your super account as these contributions are made before-tax income.

1. Superannuation Guarantee (SG) contributions

These are the contributions made by your employer into your super account on your behalf.  In 2023-24 the SG rate is 11%, this is currently set to rise slowly to 12% on 1 July 2025.

2. Award contributions

In some Employment Awards or Agreements, your employer may be required to make specific super contributions.  This will depend on the Employment Award or Agreement.

3. Additional employer contributions

These are contributions made by an employer above the compulsory amount required by the SG legislation or Employment Award.  These are usually paid to employees of a large company as part of their salary package or to some public sector employees.

4. Salary Sacrifice

These contributions are an agreement you make with your employer to pay some of your before tax salary directly into your super account.   By making a salary sacrifice contribution you are reducing your taxable income and potentially how much tax you pay.

5. Personal contributions for which you can claim a tax deduction

You can claim a full tax deduction for personal contributions.  Tax deductable contributions can be made until you reach age 74.  If you are aged 67 to 74, you must meet the requirements of a work test to make these contributions and claim a tax deduction.

These contributions are subject to eligibility criteria and must not exceed the concessional (before tax) contributions cap.

If you wish to make a tax deduction for a personal super contribution, you must complete the ATO’s Notice of intent to claim or vary a deduction for personal super contributions form and submit it to your super fund before lodging your income tax return for the financial year.

Non-concessional (after tax) or personal voluntary contributions: 2 main types

There is no 15% contributions tax payable on these super contributions when they are added to your super account, as you have already paid tax on the money.

1. Personal contributions from your take-home pay

These are contributions you make from your after tax salary or wages.  You cannot claim a tax deduction for these contributions.

Personal or voluntary contributions can be made to your super fund until you reach the age of 75.

2. Spouse contributions

If you are married or in a de facto relationship (including same sex couples), you can make super contributions on behalf of your spouse.  This can be a tax-effective way to save for retirement, especially if your spouse is only working part time or has a low income.

Source: Making superannuation contributions: Super for beginners guide (superguide.com.au)