Betashares
What are super contributions?
A super contribution is an amount of money that is paid into your super account, either by an employer or yourself. Super contributions can be either one-off or regular payments.
For most of us, super contributions are compulsory amounts that are paid by our employer each pay cycle. Usually, you can see these contributions on your pay advice summary or on your super statement.
But did you know you can contribute to your super in other ways?
Super contributions you can make
You can boost your super by making your own contributions in addition to what your employer pays. Over time, these amounts add up, and you can benefit from your investment earnings compounding.
There are two types of super contributions you can make: concessional and non-concessional.
Concessional contributions
A concessional contribution, also referred to as a before-tax contribution, is paid to your super account from your pre-tax income. Concessional contributions include:
- Payments made by an employer as per the Superannuation Guarantee scheme.
- Salary sacrifice contributions. Your employer deducts an amount that you nominate from your pre-tax salary and pays it to your super fund. These contributions are an effective way to boost your super and save on tax.
- Personal deductible contributions (PDC). These are payments you make to your super account yourself. You can then claim a tax deduction for these contributions. Self-employed people and employees are both able to make a PDC payment.
Concessional contributions are taxed at 15% when paid into your super account. However, if your combined income and concessional contributions are more than $250,000, the tax rate is 30%.
The yearly cap for concessional contributions for the financial year 2024-25 is $30,000.
Non-concessional contributions
A non-concessional, or after-tax contribution, attracts no tax when paid into your super fund because you have already paid income tax on the money you are contributing.
The yearly cap for non-concessional contributions for the financial year 2024-25 is $120,000. You may also be eligible to bring forward the equivalent of 1-2 years of the yearly cap depending on your circumstances. For more information visit the ATO website.
If you make non-concessional contributions into your super account, you may be eligible for a Government co-contribution. For the latest details on super co-contributions, visit the ATO website.
Contributing to your spouse’s super
You can also contribute to your spouse’s super. If your spouse is earning a low income or not working, you may be able to claim a tax offset. You can find more information on spouse contributions here.
Grow your super with extra contributions
If you are considering growing your super with extra contributions, there are tools that can help. MoneySmart’s super contributions optimiser can help you decide whether it is better to make extra contributions before or after tax, or both.
Transfer Balance Cap
There is a limit on the total amount of super that can be transferred into the retirement phase, this is referred to as the transfer balance cap and is $1.9 million from 1 July 2023. For more information, visit the ATO website.
An exciting future in superannuation
Betashares has recently acquired Bendigo Superannuation. Learn more about the acquisition and our future plans in superannuation.
This information is current as at 1 October 2024 and may be subject to change. You should not rely on this article to determine your personal tax obligations or other entitlements.
Bendigo Superannuation Pty Ltd (ABN 23 644 620 128 AFSL 534006) (Bendigo Super) is the trustee and issuer of Bendigo SmartStart Super and Bendigo SmartStart Pension (Products). Before making an investment decision in relation to the Super Products, read the relevant Product Disclosure Statement, available from this website (www.betashares.com.au/super/) or by calling 1800 033 426, and consider whether the product is right for you. You can find the Bendigo SmartStart Super Target Market Determination here and the Bendigo SmartStart Pension Target Market Determination here. This information is general in nature and doesn’t take into account any person’s financial objectives, situation or needs. You should consider its appropriateness taking into account such factors and seek professional financial advice. Past performance is not indicative of future performance.
