Concessional contributions are before-tax contributions, which are taxed at a maximum flat rate of 15%. They include employer contributions, salary sacrifice contributions and personal deductible contributions.
When making concessional contributions, you must ensure you do not exceed the annual concessional contribution cap which is $25,000 for the 2020/21 financial year. If you contribute more than this, you may need to pay extra tax.
However, from 2019/20 carry-forward rules allow you to access unused concessional cap amounts from previous years in order to make extra concessional contributions without having to pay extra tax. If your total superannuation balance is less than $500,000, you can access your unused concessional contributions caps on a rolling basis for five years. Amounts carried forward that have not been used after five years will expire. For further information, please visit the Australian Taxation Office (ATO) website.
If you think that making additional contributions might push you over the cap, please contact our Member Care Team to check before you make any additional contributions.
There are a couple of different ways you can make additional concessional contributions: salary sacrificing and personal deductible contributions.
Salary sacrificing into your super is done through your employer, where they pay a percentage of your pre-tax salary as an additional concessional contribution to your super account. This arrangement enables you to pay 15% contributions tax on the amount you contribute rather than your marginal tax rate (this could be 21%, 34.5%, 39% or 47% including the 2% Medicare Levy) depending on your taxable income.
EXAMPLE: Ben is 60 years old, earns $70,000 taxable income and salary sacrifices $10,000. He will save nearly $2,000 in tax (i.e. 32.5% + 2% Medicare Levy – 15%) x $10,000 = $1,950.
Note that there is no tax benefit in salary sacrificing additional super contributions if you do not pay tax (generally if your taxable income is less than $18,200).
Personal deductible contributions
Personal deductible contributions (also known as voluntary after-tax contributions), may help you achieve the same result as salary sacrificing if you then claim a tax deduction. This method involves using your after-tax income (e.g. funds from a bank account) and submitting a Notice of Intent Form to claim the tax deduction.
How to claim a tax deduction
If you wish to claim a tax deduction on your voluntary after-tax contributions, you will need to take the following steps.
1. Make an after-tax contribution to your super account before 30 June
If you’d like to make your contribution via BPAY, your unique BPAY details can be found in your online MemberAccess account, on your latest annual member statement, or by logging into the Christian Super app. You can also contact us to get these BPAY details.
2. Lodge a Notice of Intent Form with Christian Super
The second step is to lodge a Notice of Intent Form with us. This is a form from the ATO which allows you to claim or vary a tax deduction for personal super contributions.
Once you have completed the form, email it to firstname.lastname@example.org or post it to Locked Bag 5073, Parramatta NSW 2124. We will acknowledge receipt of the form and payment in writing.
3. Have your paperwork in order when you do your tax return
After 30 June, you can lodge your tax return using the written acknowledgement you have received from Christian Super which confirms the amount that you wish to claim as a tax deduction. You have until 31 October to lodge your tax return for the previous financial year, though you may have more time if you use a registered tax agent.
This is part of our 4-part series on contributions. Click on the links to read more:
Disclaimer: The content of this article includes advice that is general in nature and does not consider your personal situation. Christian Super encourages all people considering their options in retirement planning to seek out qualified professionals who can provide specific personal advice.
The information on this page was last updated on 21st April 2021