Making superannuation contributions: Super for beginners guide

Building a sizeable retirement nest egg can take some effort, but most employees leave the heavy lifting to their employer. According to APRA’s statistics, just under 70% of contributions going into the super system were made by employers during 2022–23.

While your employer’s compulsory Super Guarantee (SG) contributions provide some level of financial security in retirement, if you are relying on that alone you risk not having enough super to enjoy the retirement you dream of.

The solution is to give your super account a boost by making some extra contributions yourself. Although working out the best way to do that can be a little confusing, here’s an overview of the main types of super contributions.

Super contributions: The two basics you need to know

1. It’s all about the tax

The key to understanding different types of super contributions is to remember it’s all about what tax you pay. There are two main types of super contributions:

• Concessional (before-tax) or tax-deductible contributions
• Non-concessional (after-tax) or personal contributions.

You may also receive contributions into your super account from the Australian Government if you meet certain eligibility criteria.

2. There are annual caps on your contributions

As there are tax benefits from holding savings in your super account, the government has set annual caps or limits on both your concessional (before-tax) and non-concessional (after-tax) contributions into super.

The caps are indexed and any contributions you make over these annual limits are subject to extra tax. The limits apply to the total of all your super accounts across different super funds.

Concessional (before-tax) super contributions: 5 main types

There is a 15% contributions tax payable on all concessional super contributions when they are added to your super account as these contributions come from your before-tax income.

1. Superannuation Guarantee (SG) contributions

SG contributions are the compulsory contributions made by your employer into your super account on your behalf as part of your total salary package. In 2024–25, the SG rate is 11.5% of your ordinary time earnings (OTE). This will rise to 12% on 1 July 2025, where it is scheduled to stay.

2. Award contributions

In some Employment Awards or Agreements, your employer may be required to make specified super contributions.

The amount of these super contributions depends on the particular Employment Award or Agreement certified by an industrial authority like the Fair Work Commission.

3. Additional employer contributions

These are contributions made by an employer above the compulsory amount required by the SG legislation or Employment Award. They are generally paid to employees of large companies as part of their salary package, or to some public sector employees.

4. Salary sacrifice

You can agree with your employer to pay some of your before-tax income directly into your super account. This is called salary sacrifice. You can set up a salary-sacrifice arrangement at any time, but it can only relate to income you have not yet earned. This means salary sacrifice of your usual wage may take a pay cycle to come into effect if you are usually paid in arrears. If you have an annual bonus, you generally need to choose how much of it you would like to sacrifice before the year the bonus relates to begins.

By making a salary-sacrifice contribution, you are reducing your taxable income and, potentially, how much tax you pay. This can be worthwhile if you pay more than 15% tax on your last dollar of income, as instead of paying your higher marginal rate of tax on your salary or wages, you only pay 15% tax on your super contribution. (If your total income plus concessional contributions is over $250,000, you have to pay an additional 15% on some or all of your super contributions.)

Your employer is required to pay the amount you decide to salary sacrifice from your salary or wages on top of the SG contribution they are required by law to pay. Legislation introduced from 1 January 2020 made it illegal for employers to use your salary-sacrifice contributions to reduce the amount of SG they were required to pay into your super account.

5. Personal contributions for which you claim a tax deduction

For many years, employees could not make this type of contribution into their super account. These contributions were only available to the self-employed, as they didn’t have an employer making super contributions on their behalf. 

Since 1 July 2017, most people (whether self-employed or not), are able to claim a full tax deduction for personal contributions. If your employer won’t allow you to set up a salary-sacrifice arrangement to make contributions into your super account, tax-deductible personal contributions can be a good alternative, as these contributions have the same effect.

Tax-deductible personal contributions can be made until you reach age 74. If you are aged 67 to 74, however, you must meet the requirements of a work test to make these contributions and claim a tax deduction.

If you wish to claim a tax deduction for a personal super contribution, you must complete the ATO’s Notice of intent to claim or vary a deduction for personal super contributions form and submit it to your super fund before lodging your income tax return for the financial year. This form is available to download from the ATO or your super fund’s website.

Non-concessional (after-tax) or personal voluntary contributions: 2 main types

There is no 15% contributions tax payable on these super contributions when they are added to your super account, as you have already paid tax on the money. 

If you wish to make a non-concessional contribution, the balance of all your super accounts at 30 June of the previous financial year must not be greater than $1.9 million.

If your total super balance was greater than the limit on the prior 30 June, any non-concessional contributions you do make will be excessive contributions because they are above your contribution limit of zero. 

1. Personal contributions from your take-home pay

These are contributions you choose to make from your after-tax salary or wages. You can’t claim a tax deduction for these contributions.

Personal contributions can be made regularly from your after-tax pay, or as a lump sum at any time through the year. Most funds will accept a lump sum contribution from your bank account via BPay or direct debit. You must have supplied your TFN to your super fund before it will accept personal contributions.

Your super fund can accept personal or voluntary contributions from you until you reach age 75. (Your contribution must be received by your super fund within 28 days after the end of the month in which you turn age 75. Non-concessional contributions will not be accepted after this date.)

2. Spouse contributions

If you are married or in a de facto relationship (including same-sex couples), you can make super contributions on behalf of your spouse. These contributions can be a tax-effective way to save for retirement, particularly if your spouse is only working part time or has a low income.

If you decide to contribute to your spouse’s super account, you may be eligible to receive a tax offset of up to $540 on your annual tax bill.

To be eligible, you must both be Australian residents when the contribution is made and must not be living separately on a permanent basis. Contributions cannot be made if your spouse has reached age 75.

In addition, your spouse must not have exceeded their non-concessional contributions cap in the year you make the contribution, or have a Total Super Balance of $1.9 million or more on 30 June of the financial year before you made the contribution.

Annual income for receiving spouse	Your tax offset
Less than the low-income threshold of $37,000	Up to a full tax offset of $540 (actual amount is calculated as 18% of the lesser of $3,000 and your total contributions for your spouse)
Between $37,000 and the cut-off threshold of $40,000	Maximum offset amount is reduced by $0.18 for each dollar the receiving spouse’s income is over the low-income threshold
More than $40,000	Nil

Other types of super contributions: 3 main types

1. Downsizer contribution

If you are aged 55 (see note below) or older and meet all the eligibility requirements, you may be able to make a downsizer contribution into your super account of up to $300,000 from the proceeds of selling your home (or up to $600,000 for couples).

The ATO doesn’t classify downsizer contributions as non-concessional contributions, so they don’t count towards your annual non-concessional contributions cap (see earlier in the article).

There is no work test for making downsizer contributions and you don’t need to be under age 75.

Downsizer contributions can be made even if your Total Superannuation Balance is over $1.9 million.

2. Government co-contributions

Under the co-contribution scheme, you receive a payment from the government when you make voluntary (after-tax) super contributions into your super account. The amount of co-contribution you receive in your super account depends on your income and the size of your personal super contribution.

In the 2024–25 financial year, if you pass several qualifying tests and earn less than $60,400, you could receive a maximum co-contribution of $500, with a minimum payment of $20.

The ATO calculates if you are eligible for a co-contribution payment and pays the amount directly into your super account. You must have provided your super fund with your tax file number (TFN) to receive a co-contribution payment.

3. Low-income super tax offset (LISTO)

LISTO contribution payments into your super account are designed to ensure low-income earners don’t pay more tax on their super contributions than they do on their take-home pay. These payments are made into your super account as a refund of part of the normal 15% contributions tax you paid on concessional (before-tax) contributions made into your super account.

If you earn $37,000 or less a year, you will receive a LISTO payment of 15% of your concessional contributions, up to a maximum of $500. LISTO payments are calculated and paid directly by the ATO into your super account.