Your Guide to Super Contributions

Saving and investing for your future is one of the wisest things you can do, whether you are just starting out in your career, mid-way through life, or approaching retirement.

To live out a purposeful retirement, you may need to make additional contributions to your super, over and above the mandatory employer-paid 9.5% superannuation guarantee. Despite fact that many people need to make additional contributions to save enough for their retirement years, only 1 in 5 Christian Super members currently make additional contributions to their super.i

 

What are super contributions?

Any money that is deposited into your super account (usually by you or your employer) is a super contribution. This can be an ongoing payment or a one-off payment.

There are TWO types of super contributions, concessional contributions and non-concessional contributions.These two types of contributions are taxed differently and there are different contribution caps for each type. We’ll explain the differences in more depth below, but for now here is a brief overview:

Concessional contributions Non-concessional contributions
Also known as before-tax contributions as they get taxed within superannuation at 15% rather than being taxed at your marginal income tax rate.

Concessional contributions include Superannuation Guarantee (SG) contributions from your employer, salary sacrifice contributions and personal deductable contributions (i.e. any after-tax payments that you make into your super which you then claim as a tax deduction).

Also known as after-tax contributions because they have already been taxed at your marginal income tax rate. This means that they are not taxed when they are received by your super fund.

Non-concessional contributions are generally personal payments that you have not claimed as a tax deduction.

 

What caps apply to super contributions?

The table below summarises the caps for the 2020/21 financial year. Further detail is available on the Australian Taxation Office (ATO) website.

Contribution type Your age Contributions cap
Concessional All ages $25,000 each financial year*
Non-concessional 65 or younger $100,000 each financial year**
Over 65 $100,000 each financial year

* 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. For further information, please visit the Australian Taxation Office (ATO) website.

** If you are 65 years old (or younger) at any time in a financial year, you may be able to make non-concessional contributions of up to three times the annual non-concessional contributions cap in a single year. This is known as the bring-forward arrangement. Visit the ATO website for further information including eligibility criteria.

 

Are you eligible to make super contributions?

If you’re under 67 years old, you are generally able to make all types of contributions with the exception of downsizer contributions (these can only be made if you are 65 years or older and meet certain eligibility criteria).

If you’re 67 years or older, you will need to satisfy the work test or work test exemption in each financial year in order for your fund to accept certain types of contributions.

To meet the work test, you must be gainfully employed for at least 40 hours during a consecutive 30-day period in the financial year in which the contributions are made. More information is available on the ATO website.

The table below summarises the types of contributions you may be able to make if you are 67 years or older:

Contribution type Aged 67 to 69 years Aged 70 to 74 years Aged 75 years or older
Compulsory employer contributions Yes Yes Yes
Downsizer contributions Yes Yes Yes
Salary sacrifice contributions Work test required Work test required Not permitted*
Personal contributions Work test required Work test required Not permitted*
Spouse contributions Work test required Work test required Not permitted*

* Your super fund may be able to accept these contributions in the 28 days after the end of the month during which you turn 75 years old, if you satisfy the work test or the work test exemption.

 

This is part of our 4-part series on contributions. Click on the links to read more:

  1. Your Guide to Super Contributions
  2. Concessional Contributions Explained
  3. Non-Concessional Contributions Explained
  4. The Benefits of Making Additional Contributions

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