Personal super contributions

Are you eligible to make personal super contributions?

You may be eligible to make personal super contributions (and may do so without adverse tax consequences) if:

Concessional contributions (before-tax contribution)

• you are under the age of 75; and
• you have not gone over the concessional contributions cap (currently $30,000, which may be higher if you are eligible to carry forward unused amounts) for the current financial year.

Non-concessional contributions (after-tax contribution)

• you are under the age of 75;
• you have not gone over the non-concessional contributions cap (currently $120,000, which may be higher if you are eligible to for bring forward of future years’ amounts) for the current financial year; and
• your total super balance on 30 June 2024 is less than $1.9 million.

A super fund can also accept personal contributions from you if you are age 75, if the contributions are received by the 28th day of the following month to when you turned 75. For example, if your birthday is the 1st January, the contribution must be received by the 28th February. 

Keep in mind that if you are a sole-trader or self-employed, it's likely that you won’t be able to make concessional contributions. It’s worth familiarising yourself with the super contribution rules that apply to your situation. 

Potential benefits of personal super contributions

There are many reasons why you might consider making personal contributions, including:

1. Growing your super balance: The more money in your super account, the more that may be invested by your fund. Over time, your balance may grow faster as you’re earning returns on a larger amount (like a ‘snowball effect’).
2. Government co-contributions: You may qualify for government co-contributions by making non-concessional contributions. This means a potential boost of up to $500 for your super from the government, if eligible.
3. Claiming tax deductions: You could receive tax deductions for making personal super contributions which would be concessional contributions, if eligible.   

Tax considerations

If eligible, you may qualify for a tax deduction for making a concessional contribution. This reduces your taxable income for the financial year and means you could potentially pay less tax. The super fund will pay tax of up to 15% on your concessional contributions.

Any money your super earns from your contributions are generally:

• taxed at 15% if you’re in the accumulation phase; and
• not taxed if you’re in the retirement phase. If your super balance exceeds the transfer balance cap, the excess will be taxed.

Just remember, there are contribution caps and going over them could mean paying additional taxes on contributions.

When you reach the age of 60 and take out your contributions (and any earnings as a benefit), you don’t have to pay any tax on it. Before age 60, tax generally applies at concessional rates. 

How to claim a tax deduction for personal contributions

If you want to claim a tax deduction on your personal contributions, here’s how to start the process. You’ll just need to fill in and send your super fund a valid ‘Notice of intent to claim a deduction’ form before you lodge your personal tax return. It is important to note that the fund must also have acknowledged receipt of the notice before you lodge your personal tax return.

Keep in mind that if you claim a tax deduction on your personal contribution, this becomes a concessional (before-tax) contribution. The contributions that you claim a tax deduction on will not be eligible for a government co-contribution and they will be taxable in the fund. These are also subject to the concessional contribution caps.