Personal after-tax contributions
After-tax (or non-concessional) contributions are a great way to boost your super savings. You can make a one-off payment or regular payments throughout the year. Either way, these contributions are not taxed going into your super (because they have already been subject to income tax).
You can make up to $100,000 (or up to $300,000 using the three-year bring forward rule^) of after-tax contributions into your super per year. The amount you can bring forward decreases once your total super balance has reached $1.4 million. If your total super balance is more than $1.6 million, you can no longer make any after-tax contributions.
With this type of contribution you may also qualify for the Government co-contribution payment. After-tax contributions can also be used to help you save on income tax – see ‘using after-tax contributions for tax purposes’ below.
If you’re over 67, you must have worked for at least 40 hours over 30 consecutive days in a financial year to be eligible (also known as the work test) to make after-tax contributions. Alternatively, you may be eligible if you’ve met the work test the previous financial year and have a total super balance of less than $300,000. Once you turn 75, you can no longer make after-tax contributions. We must have your tax file number to be able to accept contributions.
Claiming a tax deduction on personal after-tax contributions
If you make personal after-tax contributions, you will have the option to claim a tax deduction. This is helpful if you are self-employed or are unable to salary sacrifice with your employer.
Claiming after-tax contributions as a tax deduction reduces your taxable income whilst increasing your savings for retirement. It can be particularly beneficial because the contribution is taxed at 15% in the super fund instead of your marginal rate of tax which can be a lot higher.
We always recommend you get professional advice before making a decision on how much to contribute or claim.
Remember also that tax-deductible contributions are limited to $25,000 per year. If your employer makes super contributions into your account (generally 9.5% of your salary), then this is counted towards the $25,000 limit.
For more information, view our ‘How Super works’ document.
Important: If you make an after-tax contribution and want to claim it as a tax deduction, you’ll need to let us know by filling in the Notice of Intent to claim form below and send this back to us by 5pm Tuesday June 22nd 2021. We’ll issue you a letter for tax purposes after June 30. If you don’t let us know, it will remain as an after-tax contribution and count towards that annual limit ($100,000pa).
Please return your completed form to Equip, GPO Box 4303, Melbourne VIC 3001.
Things to consider
- The “best” contribution depends on your circumstances, such as your income, tax situation and age.
- Get help if you need it: we can provide you with information and advice to help you make the most of your contributions.
- Contributions made into your super cannot be withdrawn until age 65 or if you retire and reach your preservation age.
We’re here to help
If you have questions about after-tax contributions, we can help. Contact us on 1800 682 626 between 8:00 am and 8:00 pm AEST Monday to Friday or make an enquiry online.