End of financial year hub

There are two caps to be aware of – the concessional (before-tax) contribution cap, and the non-concessional (after-tax) contribution cap. We’ve included a brief summary below, but you’ll find more detail on the  ATO website.

There are limits on how much you can contribute to your super each financial year – these are called 'contribution caps', and they’re set by the government.

If you go over a cap, it’s likely you’ll end up paying significantly more tax than you might otherwise have paid, so it’s important to take the caps into account if you’re making additional contributions to your super.

What is the concessional contributions cap?

This is a limit applied to before-tax (or concessional) contributions to your super account (these include contributions from your employer, salary sacrifice contributions, and personal deductible contributions).

For the 2024-25 financial year, you can make up to $30,000 in concessional contributions to your super, and these will be taxed at 15% (or more if you earn more than $250,000 a year). If you have more than one super account, this total is across all of your accounts combined. 

If you go over the cap, any excess contributions will be included in your assessable income, and they’ll generally be taxed at your marginal tax rate (a 15% tax offset will apply). But first, the ATO will let you know if you’ve gone over the cap and explain the options available to you.

To find out more visit the ATO website to find out more about concessional contributions cap, how it’s applied, and what you can do if you go over the cap.

Carry-forward of unused concessional contributions cap

You may be able to carry-forward unused concessional contributions cap from previous financial years.

If your total super balance is less than $500,000 you can carry forward the unused portion of your concessional contributions cap on a rolling basis over five years. This means that you may be able to make before-tax contributions of more than the concessional contributions cap in certain years without incurring additional tax. You can find more information on the carry-forward of the unused concessional contributions cap at the ATO website.

Bring forward of your non-concessional (before-tax) contributions cap

If you are under age 75, you may be able to bring forward up to three years’ worth of contribution limits and make contributions of up to $360,000 in one year; this will reduce the amount of contributions you can make for the remainder of the three-year period. The amount of unused non-concessional contribution cap you can bring forward depends on your total superannuation balance on 30 June of the prior financial year.

The First Home Super Saver Scheme (FHSS scheme) is a government scheme to help first home buyers save money for a home using their super fund.

To use this scheme, you need to make additional contributions to your super account, other than any superannuation guarantee contributions your employer makes. You can do this by making personal after-tax contributions (and claiming a tax deduction if eligible*) or salary sacrifice contributions.

You can then apply to release these contributions, along with any associated earnings, when you’re ready to buy your first home.

Eligibility

You can start making super contributions from any age, but you can't request a release of amounts under the First Home Super Saver scheme (FHSSS) until you are 18 years old, and you:

• Have never owned property in Australia – this includes an investment property, vacant land, commercial property, a lease of land in Australia, or a company title interest in land in Australia (unless the ATO determines that you have suffered a financial hardship)

• Have not previously requested the Commissioner to issue a FHSS release authority in relation to the scheme.

Eligibility is assessed on an individual basis. This means that couples, siblings or friends can each access their own eligible FHSS contributions to purchase the same property. If any of you have previously owned a home, it will not stop anyone else who is eligible from applying.

The property you purchase must be a residential premises and you have up to 12 months from the time you receive an FHSS payment from the ATO to sign a contract to purchase or construct a home. If you purchase a block of land to build your home on, you must have a contract in place to construct the home with the 12-month period.

For more information on the terms and conditions of eligibility for the FHSS scheme, go to our dedicated web page.

How much can you contribute?

You can make extra contributions up to the normal limits applying to super:

• A limit of $30,000 applies for concessional contributions (and these include any contributions your employer might be paying), or those for which you’ve claimed a tax deduction; and/or

• A limit of $120,000 applies for after-tax (non-concessional) contributions paid out of your after-tax pay or savings, for which you haven’t claimed a tax deduction.

Learn more about contribution caps here.

However, there are limits to how much of these voluntary contributions you can withdraw under the FHSS scheme (see below). For more information, visit our dedicated web page.

*Make sure to let us know you wish to claim a tax deduction by completing and returning this form. If you don’t claim a tax deduction on your personal contribution, then it will be counted as an after-tax (non-concessional) contribution and no tax benefit will be received.

What is salary sacrificing?

Salary sacrificing involves paying some of your before-tax salary (that’s your income before any income tax has been calculated or deducted) straight into your super account.

Your employer will deduct the amount you've nominated from your before-tax salary each pay.

Not only can it boost your super balance, but it can also potentially reduce your tax rate.

That’s because the money is directed into your super before you’ve paid income tax on that portion of your salary. Once it's in your super account, it’s taxed at just 15%*, which is likely to be lower than the marginal tax rate that would have applied otherwise. 

Would salary sacrificing work for you?

Salary sacrifice contributions may not be right for everyone.

If the tax you pay on your salary sacrifice contributions is lower than your marginal individual income tax rate, you may be able to achieve significant tax savings.

For those whose income is more than $250,000 a year, it’s worth noting that there is an additional tax on super contributions, generally charged at 15% of an individual’s taxable contributions. In addition, salary sacrificing may take you over the before-tax contribution cap.

For those on a low income, salary sacrificing may not result in effective tax savings for you.

We recommend you check with a qualified financial planner to determine the best contribution strategy for your circumstances and long-term financial goals.

We’ve put together this module to help explain salary sacrifice.

*If your income plus your super contributions exceed $250,000 you’re taxed at an additional 15% on either your contributions or the amount that’s over $250,000, (whichever is lower).

You could boost your super by up to $500

If you earn a total income of less than $60,400 for the 2024-25 financial year, you may be eligible for a super co-contribution (also called a government co-contribution) of up to $500.

How does the co-contribution work?

If you make a personal after-tax contribution to your super during the financial year, you can receive up to $0.50 from the government for every $1 you added (up to $500, if your total income is $45,400 or less).

The amount of the co-contribution reduces for every dollar you earn over $45,400 and cuts out completely at $60,400. Once you lodge your tax assessment, the Australian Taxation Office (ATO) will automatically assess your eligibility and pay any entitlement into your super account later in the year.

For more information visit our dedicated web page.

What are spouse contributions?

A spouse contribution is an after-tax payment made by a member into the super account of their spouse.

If one partner is earning a low income, or perhaps taking time off work, a spouse contribution can help to ensure their super account keeps growing.

If you make a contribution for your spouse who earns a low income (or if you receive one from your spouse and you’re earning a low income), the contribution may also be eligible for a tax offset of up to $540 for the contributing spouse.

This can also make them an effective strategy for reducing tax, depending on your circumstances.  Eligibility criteria apply to those claiming a tax offset – you can find out more on the ATO website. 

For more information visit our dedicated web page.