It all adds up
One of the best ways to add to your super is to make your own regular contributions, in addition to what your employer is already paying. You can also make a payment in one go. It's really up to you.
Just to give you some perspective, ASFA’s Retirement Projector estimates that contributing an extra $50 a month could add thousands to your final retirement savings balance if you start early.
REST has a handy calculator that helps you explore how your additional contributions could make a difference to your overall position.
After-tax contributions, also called non-concessional contributions*, is money that you add into your super from your post-tax income. You can contribute up to a limit of $100,000 pa. However, if your total super balance is over $1.6 million on 30 June of the year before the relevant financial year, you won’t be able to make any non-concessional contributions*.
If you’re under age 65 and your total super balance on 30 June 2017 is less than $1.6 million, you can bring forward up to three years' worth of contributions^. If you decide to do this, you won’t be able to contribute any more for the next three financial years. The amount you can bring forward will depend on your total super balance and when you triggered the bring-forward rule. For more information on the bring-forward rule, see our Super facts & figures.
Exceeding the caps
Contributions that exceed these limits attract an excess after-tax contributions tax, which is equivalent to the current top marginal rate plus Medicare Levy if you leave these excess amounts in super. You have the option to withdraw the excess amount to avoid paying this tax.
Claiming a tax deduction on after-tax contributions
From 1 July 2017, if you make an after-tax contribution into super, you may be eligible to claim a tax deduction on that contribution in your next tax return. This is a fantastic opportunity to boost your super because it means you’ll only end up paying 15% contributions tax (which your super fund deducts from your contribution). To claim a deduction on your after-tax contribution, you’ll need to submit a ‘Notice of intent to claim or vary a deduction for personal super contributions’ to REST before the end of the financial year.
For more information on claiming a tax deduction on personal contributions, see the Australian Tax Office website.