In this guide
When it comes to building a retirement nest egg, most people realise their employer is doing the bulk of the heavy lifting through their regular Superannuation Guarantee (SG) contributions.
But that’s not the only way to build up your super balance. You can also make contributions into your super account from your take-home pay or savings outside the super system.
If you’re interested in learning more about how to boost your retirement savings through personal super contributions, SuperGuide has prepared this simple guide to non-concessional contributions.
What is a non-concessional super contribution?
For most employees, their employer’s SG contributions are part of their salary package and they are made from money that has not yet been taxed. When this money goes into your super account, it’s taxed concessionally at the special low rate of 15% (the contributions tax).
On the other hand, if you decide to make personal contributions into your super account, they can come from money that has already been taxed at your normal tax rate. These contributions are called non-concessional (or after-tax) contributions because tax has already been paid on the money you use to make the contribution.
You can also make personal contributions that are concessional by salary sacrificing or claiming a tax deduction for your personal contributions.
What types of contributions are non-concessional?
There are several types of non-concessional (after-tax) contributions:
- Personal contributions you make and don’t claim as a tax deduction in your income tax return. These are often called ‘voluntary’ contributions and can be either a large lump sum or small regular amounts.
- Contributions processed as a payroll deduction from your after-tax income.
- Spouse contributions made by you into your spouse’s super account or by your spouse into your account. A tax rebate is available for the contributing spouse if the receiving spouse has a low income. Learn about spouse contributions.
- Excess concessional (before-tax) contributions you have not released from your super fund.
- Retirement benefits you withdraw from your super and recontribute, for which you have not claimed a tax deduction. Learn about recontribution strategies.
What is the non-concessional contributions cap?
There are annual caps (or limits) on the amount of non-concessional contributions you can make into your super account. This annual cap increases in line with indexation of the concessional (before-tax) contributions cap.
The general annual cap for non-concessional contributions for 2024–25 is $120,000.
Your individual non-concessional cap may be different from the general annual non-concessional contributions cap. It can be higher if you use a bring-forward arrangement, or nil if your Total Superannuation Balance (TSB) was greater than or equal to $1.9 million on 30 June 2024.
Non-concessional contributions caps in the current and previous financial years
| Income year | Amount of cap* |
|---|---|
| 2024–25 | $120,000 |
| 2023–24 | $110,000 |
| 2022–23 | $110,000 |
| 2021–22 | $110,000 |
| 2020–21 | $100,000 |
| 2019–20 | $100,000 |
*These caps are subject to any bring-forward arrangements commenced in prior years.
Three types of contributions don’t count towards your annual non-concessional contributions cap:
- Personal injury payments
- Contributions you chose to count towards your lifetime capital gains tax cap that don’t exceed your lifetime limit. (Learn about the small business retirement exemption and 15-year small business exemption.)
- Downsizer contributions from selling your home. (Learn about downsizer contributions.)
These contributions are only excluded if you meet all the conditions and specifically ask your fund to exclude them by providing the necessary paperwork.
5 reasons non-concessional contributions are valuable
1. No contributions tax
When you make non-concessional contributions with your after-tax money, there is no 15% contributions tax payable as they enter the super system.
2. Lower tax on investment earnings
The tax rate on any investment earnings in your super account is a maximum of 15%, which is often a lot lower than the tax rate on your investment earnings outside the super system.
3. Tax-free withdrawal
These contributions form a component in your superannuation that is tax-free on withdrawal, regardless of the recipient. This can reduce tax to beneficiaries if you pass away.
4. Higher contributions cap
The non-concessional contributions cap ($120,000 in 2024–25) is much higher than the concessional contributions cap ($30,000 in 2024–25), which means you can add more to your retirement nest egg.
5. Potential government co-contribution payment
If you are a low or middle-income earner and make a personal after-tax contribution, you may qualify for a co-contribution payment of up to $500 from the government. To be eligible, you must not have exceeded your non-concessional contributions cap in the relevant financial year.
Am I eligible to make non-concessional contributions?
To make a non-concessional contribution into your super account, you must meet two eligibility criteria, in addition to staying within your contribution cap:
1. Total Superannuation Balance limit
You must have a Total Superannuation Balance (TSB) of less than the general Transfer Balance Cap ($1.9 million in 2024–25) on 30 June of the previous financial year.
If your TSB was above this limit on the relevant day, your non-concessional contributions cap for the financial year is nil ($). This means you will not be able to make any non-concessional contributions in the current financial year without paying additional tax.
2. Age limit and work test
If you are aged under 75 you are eligible to make a non-concessional contribution even if you are not working.
Your fund may also be able to accept contributions until 28 days after the end of the month you turned 75, but it’s better not to leave your contribution until the last minute!
How do I make a non-concessional contribution?
Making a non-concessional contribution is easy, with most super funds allowing you to make them using payment systems like cheque, BPAY or electronic funds transfer.
You can make a non-concessional contribution as a single lump sum or as lots of smaller contributions throughout the year – it’s up to you.
Alternatively, you could ask your employer to make regular after-tax deductions from your salary and forward them to your super account along with their contributions.
You don’t need to notify your fund you are making a non-concessional contribution, they will assume voluntary member contributions are non-concessional unless you inform them otherwise.
