Types of super contributions
Before choosing a strategy, separate super contributions into the two buckets the ATO cares about: concessional contributions, which receive concessional tax treatment, and non-concessional contributions, which are made from money that has already been taxed.
If you are still deciding whether super is the right tax lever at all, the income tax guide helps frame how super fits beside deductions, HELP, and other planning decisions.
Concessional contributions
Made from pre-tax income. Includes employer Superannuation Guarantee (SG) payments, salary sacrifice, and personal contributions for which you claim a tax deduction. Taxed at a flat 15% inside the fund (or 30% with Division 293 — see below).
Non-concessional contributions
Made from after-tax income — money on which you have already paid income tax. These contributions are not taxed again inside the fund (0% tax on entry). Withdrawals in retirement are generally tax-free once you are 60+.
Government co-contribution
A bonus contribution from the government for eligible low-to-middle income earners who make personal after-tax contributions. Up to $500 matched by the government. See the co-contribution section for full details.
Concessional contributions cap 2025–2026
For 2025–2026, the concessional contributions cap is $30,000. This is a combined limit — it includes all concessional contributions regardless of source.
| What counts towards the $30,000 cap | Notes |
|---|---|
| Employer SG contributions (12%) | Compulsory employer payments — always concessional |
| Salary sacrifice contributions | Voluntary pre-tax contributions via your employer |
| Personal contributions (tax-deductible) | After lodging a valid Notice of Intent with your fund |
Example: Your employer pays 12% SG on an $80,000 salary = $9,600 in employer contributions. That leaves $20,400 remaining in your concessional cap for salary sacrifice or personal deductible contributions.
Concessional contributions are taxed at 15% inside the fund. For someone paying more than that at their marginal rate, the trade-off is usually attractive, provided the money can stay inside super.
If you are making those contributions through payroll rather than as a personal deduction, the salary sacrifice guide explains the mechanics and the trade-offs in more detail.
Non-concessional contributions cap
The non-concessional contributions (NCC) cap for 2025–2026 is $120,000 per year. These are after-tax contributions — you have already paid income tax on this money, so it enters the fund tax-free.
Bring-forward rule
If you are under 75 and your total super balance (TSB) is below $2.00 million at 30 June of the prior year, you can bring forward up to two future years of NCC cap. This allows a lump sum of up to $360,000 over three years.
| Total Super Balance (prior 30 June) | Maximum NCC (3-year period) |
|---|---|
| Under $1.76 million | $360,000 (full bring-forward) |
| $1.76 million – $1.88 million | $240,000 (2-year bring-forward) |
| $1.88 million – $2.00 million | $120,000 (no bring-forward) |
| $2.00 million or more | Nil — NCC cap is $0 |
Source: ATO — Non-concessional contributions cap. Thresholds indexed periodically.
Division 293 tax
If your income plus concessional super contributions exceeds $250,000, you pay an additional 15% tax on those concessional contributions — on top of the standard 15% fund tax. This brings the effective concessional contributions tax rate to 30% for high earners, reducing (but not eliminating) the tax advantage of salary sacrifice.
| Scenario | Income + Super | Div 293 applies? | Tax on contributions |
|---|---|---|---|
| $200k salary + $24k super | $224,000 | No | 15% |
| $240k salary + $28.8k super | $268,800 | Yes | 30% |
| $300k salary + $30k super | $330,000 | Yes (full cap) | 30% |
Division 293 tax is assessed after lodging your tax return. The ATO will send a notice and you can choose to pay it from your super fund or personally. Even at 30%, concessional contributions may still be advantageous compared to earnings remaining in the top marginal rate bracket (45% + 2% Medicare = 47%).
Carry-forward unused concessional cap
If you have not used your full concessional contributions cap in any financial year from 2018-19 onwards, you can carry forward the unused amount and use it in a future year — subject to one important condition: your total super balance must be under $500,000 at 30 June of the previous financial year.
Unused cap amounts can be carried forward for up to five years before they expire. This means you could potentially make a very large concessional contribution in a single year if you have accumulated unused caps.
Where this rule is useful: People coming back from parental leave, career breaks, or part-time work often have unused concessional cap space. The carry-forward rule lets them make a larger catch-up contribution in a stronger income year.
Your available carry-forward amount is visible in the ATO section of your myGov account. Your fund reports contributions annually to the ATO, so balances and unused caps are updated after each financial year.
Low Income Super Tax Offset (LISTO)
The Low Income Super Tax Offset (LISTO)is a government payment designed to ensure that low-income earners don't pay more tax on their super contributions than they would on their take-home pay.
The ATO calculates and pays LISTO automatically — you do not need to apply. It is credited directly to your super fund.
| Condition | Detail |
|---|---|
| Income threshold | Adjusted taxable income $37,000 or less |
| Maximum payment | $500 per year |
| How it is calculated | 15% of total concessional contributions (capped at $500) |
| Who pays | ATO — credited directly to your super fund |
| Eligibility | Australian tax resident; must have made concessional contributions |
Example: You earn $30,000 and your employer pays $3,600 in SG contributions (12%). LISTO = 15% × $3,600 = $540, capped at $500. The ATO credits $500 to your super fund — effectively refunding the 15% contributions tax.
Voluntary contributions — is it worth it?
Making additional concessional contributions (salary sacrifice or personal deductible) saves tax today by redirecting pre-tax income into super at 15% instead of your marginal rate. The trade-off is that the money is locked away until preservation age (60 for most people born after 30 June 1964).
If you are comparing that tax saving with other options such as deductions, HELP repayments, or a novated lease, the income tax guide is a useful cross-check.
| Taxable Income | Marginal Rate (inc. Medicare) | Super tax rate | Tax saved per $1,000 |
|---|---|---|---|
| $45,001 – $135,000 | 32% | 15% | $170 |
| $135,001 – $190,000 | 39% | 15% | $240 |
| $190,001+ | 47% | 15% | $320 |
| $250,001+ (Div 293) | 47% | 30% | $170 |
Key consideration: Super is preserved until age 60. If you are younger, weigh the immediate tax saving against having that capital locked away for years. Time in market inside super (with concessional 15% earnings tax) typically favours contributions over holding equivalent investments outside super.
Government co-contribution
If you earn less than $62,488 and make a personal (non-concessional) contribution to your super fund, the government will add a co-contribution of up to $500. For eligible earners, it is a direct government top-up to your own contribution.
| Your income | Co-contribution rate | To receive max $500 |
|---|---|---|
| $47,488 or below | $0.50 per $1 contributed | Contribute $1,000 |
| $47,489 – $62,488 | Tapers to zero | Co-contribution reduces as income rises |
| $62,489+ | Nil | Not eligible |
The co-contribution is paid automatically by the ATO after you lodge your tax return. You must be under 71, have at least 10% of your income from employment or business, and not hold a temporary visa to be eligible.
If you are getting your records ready before lodging, the tax return checklist is a useful reminder of the documents and year-end steps that usually matter.
Frequently asked questions
Can I claim my personal super contribution as a tax deduction?
Yes. If you make a personal (after-tax) contribution to super and lodge a 'Notice of intent to claim a deduction' with your fund before lodging your tax return, those contributions are treated as concessional (pre-tax) and taxed at 15% in the fund. They count towards the $30,000 concessional cap.
What happens if I exceed the concessional or non-concessional cap?
Excess concessional contributions are included in your assessable income and taxed at your marginal rate (with a 15% offset for tax already paid in the fund). Excess non-concessional contributions are taxed at 47% unless you elect to withdraw them and associated earnings from your fund.
When can I access my super?
You can generally access your super when you reach your preservation age (60 for those born after 30 June 1964) and retire, or turn 65 regardless of employment status. There are limited grounds for early access such as severe financial hardship or terminal illness.
Can my employer refuse salary sacrifice into super?
Salary sacrifice is a voluntary arrangement — employers are not legally required to offer it. The 1 January 2020 legislative change ensured that salary sacrifice cannot reduce your SG entitlements, but it did not mandate employers to provide salary sacrifice. Whether your employer facilitates it depends on your employment contract, enterprise agreement, and payroll capability. Speak to your HR or payroll team.
Who is eligible for the Low Income Super Tax Offset (LISTO)?
Australian tax residents earning $37,000 or less per year who make concessional contributions (employer SG or salary sacrifice) are eligible. The ATO automatically calculates and credits up to $500 directly to your super fund — you don't need to apply.
