Voluntary super contributions are a great way of topping up your super over the years. Every dollar you put aside for super contributions now could make a big difference to your final retirement balance and your lifestyle.* There are yearly limits to how much you can contribute. These are called contribution caps. Find out more below.
Understanding contribution caps can help you manage any voluntary payments you make, and could help you avoid having to pay any extra tax.
2 types of voluntary super contributions
You can add to your super in 2 ways:
- Before-tax (concessional) contributions.
- After-tax (non-concessional) contributions.
- Contributions to your super by your employer under the Superannuation Guarantee
- Contributions to your super by your employer as part of a salary sacrifice arrangement
- Voluntary tax-deductible contributions you make.
After-tax (non-concessional) contributions
These are typically any extra voluntary contributions you make that you don’t claim a tax deduction on. For example, adding some money to your super if you get a bonus at work, or adding a set amount to your account each month from your own bank account.
Contribution caps increased on 1 July 2021. This means you can add more money to your retirement savings – without paying extra tax.
New contribution limits (from 1 July 2021)
|Income year||Concessional contribution cap||Non-concessional contribution cap|
|Until 30 June 2021||$25,000||$100,000
|From 01 July 2021
The limit for each type of contribution varies, depending on a few different factors, such as your income.
From 1 July 2021 you can contribute $27,500 a year, before tax, provided you have given us your Tax File Number. (The cap until 30 June 2021 is $25,000.) The tax rate for these contributions will depend on your income
- If you earn $250,000 a year or less, you’ll pay 15% tax on any concessional contributions.
- If your adjusted taxable income (including your concessional contributions) is more than $250,000 per year, your before-tax contributions will be taxed at 30%, to that extent.
Carry-forward rule for concessional contributions
If you haven’t met the contribution caps in previous years and want to add a lump sum to your super, you can make use of the carry-forward rule, for any concessional contributions.
This means you can carry forward any unused portion of your concessional contributions cap for up to 5 previous financial years (starting from 1 July 2019), depending on your super balance. An unused cap amount occurs when the concessional contributions you made in a financial year were less than your general concessional contributions cap.
Going over the concessional contribution limit
Any money added to your super that’s over the cap will be taxed at your income tax rate (marginal rate), minus a tax offset of 15%, plus an interest charge.
You can choose to withdraw up to 85% of excess contributions. This money won’t count towards your after-tax limit. But any extra before-tax contributions remaining in your account will count towards your after-tax contributions cap.
Super contributions made by your employer (under the SG), as well as any salary sacrifice arrangements you have, count towards your overall concessional contributions cap. But, for many people, your income tax rate is much higher than the concessional contributions tax rate, so before-tax payments are of interest. Consider what’s right for you and keep track of your total contributions to make sure you don’t exceed the limit.
To avoid any confusion, it can help to speak to someone about these changes. For personal advice, speak to a qualified financial adviser. Or for general advice you can contact the AustralianSuper team.
(non-concessional) contribution limits
From 1 July 2021, you can contribute $110,000 a year, after tax. No extra tax is payable on after-tax contributions up to this amount as it is an after-tax payment. (Until 30 June 2021, the cap is $100,000.)
Also starting on 1 July 2021, if your super balance is $1.7 million or more, you can’t make any after-tax contributions. (Until 30 June 2021, the cap is $1.6 million or more.)
Bring-forward rule for non-concessional contributions
From 1 July 2021, if you’re under 67 years old at any time during a financial year and have a super balance less than $1.7 million (the limit until 30 June 2021 is $1.6 million), you may be able to ‘bring forward’ 2 years’ worth of non-concessional contributions caps into the current year. This means you could contribute up to $330,000 (as of 1 July 2021) in a single year – without exceeding the cap. (Or $300,000 until 30 June 2021.)
Taking advantage of the bring-forward rule means you’ll have reduced non-concessional contribution limits over the following years, in line with any extra contributions made under the rule.
Non-concessional bring-forward period**
|Total super balance on 30 June of previous year||Non-concessional contributions cap for the first year||Bring-forward period|
|Less than $1.48 million||$330,000||3 years|
|$1.48 million to less than $1.59 million
|$1.59 million to less than $1.7 million||$110,000||No bring-forward period, general non-concessional contributions cap applies|
|$1.7 million or more||nil||Not applicable|
Going over the non-concessional contribution limit
Contributions that go over the non-concessional contribution cap are taxed at 47%. To avoid this you can ask your super fund to pay any contributions made over the limit back to you.
Going over the cap means you could pay significantly more tax – and eat into your super. Any associated earnings paid back to you by your fund as a result of this will be taxed at your marginal tax rate.
You’ll also be entitled to a 15% non-refundable tax offset of the associated earnings included in your assessable income. If you choose not to withdraw your excess after-tax contributions, they’ll remain in your super account and the excess will be taxed at 47%.
Spouse super contributions
If you’re an AustralianSuper member, your partner can split their before-tax super contributions with you. Up to 85% of their contributions can be paid into your super account instead of theirs, once a year. These payments can be a mix of contributions made by your partner’s employer, and any additional contributions your partner has agreed to through salary sacrificing.
Key things to note:
- If your income is less than $40,000, your partner can make after-tax contributions into your super account.
- To receive a spouse contribution tax offset, a limit of $3,000 a year applies. If your partner wants to contribute more than $3,000 a year, the tax offset will not apply to anything above $3,000.
Your income must be $37,000 or less to receive the full tax offset of $540. However, you might still be able to receive a partial tax offset if you earn up to $40,000.
Voluntary contributions – future-proofing your super
Voluntary super contributions are a great way of topping up your super over the years. Every dollar you put aside for super contributions now could make a big difference to your final retirement balance and your lifestyle.*
As always, it's important to consider other debts you may have and seek financial advice before making a decision to contribute to your super. AustralianSuper members have access to professional financial advice on a fee-for-service basis**.
Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns.
** Personal financial product advice is provided under the Australian Financial Services Licence held by a third party and not by AustralianSuper Pty Ltd.
This information may be general financial advice which doesn’t take into account your personal objectives, situation or needs. Before making a decision about AustralianSuper, you should think about your financial requirements and refer to the relevant Product Disclosure Statement available at australiansuper.com/pds. AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.