Super Contributions Explained
Important information and general advice disclaimer
The information contained in this material is general in nature and has been prepared for educational and informational purposes only. It does not take into account your personal objectives, financial situation or needs and should not be regarded as personal financial advice.
Before making any financial or investment decision, you should consider whether the information is appropriate to your circumstances and, where appropriate, seek professional financial advice. Where a financial product is referred to, you should consider the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD), where applicable, before making a decision.
While reasonable care has been taken in preparing this material, information may change over time. Any taxation, superannuation, Centrelink or other legislative information is based on our understanding of the relevant rules at the time of publication and may be subject to change.
Tony Regan is an Authorised Representative (No. 243492) of Professional Investment Services pty ltd, Australian Financial Services License No. 234951.
Super can feel like a locked box of rules, caps, ages, and forms. Yet used well, contributions can be one of the most practical ways to build retirement savings, reduce tax, and make better use of money you have already earned.
Opportunities are often most valuable at life’s turning points: a pay rise, bonus, business sale, inheritance, home sale, or the final decade before retirement. The key is knowing which contribution type fits the moment.
This guide explains the main types of superannuation contributions in plain English, with examples to show how the rules work in real life.
The big picture is simple once you know the buckets
Most personal super contributions fall into three broad buckets:
Contribution type | Common source of money | Tax treatment | Typical use |
Concessional contributions | Employer super, salary sacrifice, personal deductible contributions | Usually taxed at 15% inside super | Reducing taxable income and building super |
Non-concessional contributions | After-tax savings, inheritance, sale proceeds | No contributions tax because no deduction is claimed | Moving personal wealth into super |
Downsizer contributions | Proceeds from selling an eligible home | No contributions tax and does not count toward the non-concessional cap | Boosting super after selling the family home |
A few points matter before looking at each type.
Super contributions are not all treated the same. Some count toward annual caps. Some may need paperwork. Some are affected by your total super balance. Some are only available from a certain age, or before a certain age.
Also, money contributed to super is generally preserved until you meet a condition of release. That usually means reaching preservation age and retiring, starting a transition-to-retirement income stream, or meeting another legal condition.
The aim is not just to “put more into super.” The aim is to contribute in a way that fits your cash flow, tax position, retirement timing, and family plans.
Concessional contributions can reduce tax while growing retirement savings
Concessional contributions are contributions made before tax, or contributions where you can claim a tax deduction.
They include:
Employer Super Guarantee contributions (tax deductible to the employer but count towards your personal contribution cap).
Salary sacrifice contributions
Personal contributions where you lodge a valid notice of intent and claim a deduction
These contributions count toward the concessional contributions cap. The concessional cap for the 2026/27 year is $32,500.
NOTE: Caps are indexed and should always be checked for the year you are contributing.
Concessional contributions are generally taxed at 15% inside super. This can be attractive if your marginal tax rate is higher than 15%.
High-income earners may pay extra contributions tax under Division 293 rules.
For the 2026/27 year, Division 293 tax is an additional 15% tax on concessional (before-tax) superannuation contributions for individuals whose combined income and contributions exceed $250,000 in a financial year, as detailed by the Australian Taxation Office.
Example of a concessional contribution
Sophie earns $120,000 a year. Her employer contributes $14,400 into super for the year.
She wants to grow her super faster and reduce her taxable income. With a concessional contribution cap of $32,500, she may have room to contribute an extra $18,100 as salary sacrifice or as a personal deductible contribution.
That extra contribution may reduce her taxable income, while the money goes into super and is taxed at the concessional rate inside the fund.
This can be useful, but Sophie still needs to think about:
Her cash flow after making the contribution
Her total concessional contributions for the year
Whether her employer contributions may increase before June 30
Whether she has completed the correct tax deduction paperwork if making a personal deductible contribution
Personal deductible contributions need the right paperwork
If you make a personal contribution and want to claim a tax deduction, you usually need to give your super fund a valid notice of intent to claim a deduction. The fund must acknowledge it.
Timing matters. Problems can arise if you roll money to another fund, start a pension, or withdraw funds before lodging the notice.
For many people, the tax benefit is worthwhile. The paperwork just needs to be handled properly.
Carry forward rules can help catch up unused concessional caps
Carry forward concessional contributions allow some people to contribute unused concessional cap amounts from the previous 5 years.
In simple terms, if you did not use all of your concessional cap in earlier years, you may be able to carry forward the unused amount and contribute more than the standard annual concessional cap in a later year.
The main conditions are:
You must have unused concessional cap amounts from eligible previous financial years
Unused amounts can generally be carried forward for up to five years
Your total super balance must be below $500,000 on June 30 of the previous financial year
Current-year concessional contributions still count first, then unused amounts can be used
This rule can be especially helpful for people who had career breaks, parental leave, time out of the workforce, variable income, years where cash flow was tight, or to in a year of high taxable income, for example if they sold an investment and made a large capital gain.
Example of using carry forward concessional contributions
Daniel is 48 and self-employed. His super balance on June 30 last year was $400,000.
Over the past few years, he made only small concessional contributions because business cash flow was uneven. This year, income is stronger.
Assume Daniel’s current concessional cap is $32,500 and he has $45,000 of unused concessional cap available from prior eligible years.
That may allow him to make concessional contributions of up to $77,500 for the year, being the current cap plus carried-forward unused cap amounts.
If Daniel has already made $10,000 in concessional contributions this year, he may have room for another $67,500.
If he makes this as a personal deductible contribution, he needs to lodge the notice of intent correctly.
This can be powerful, but it is also an area where mistakes can be costly. The ATO tracks available carry forward amounts through myGov, but those figures should be checked carefully, especially if recent contributions, rollovers, or fund reporting delays are involved.
Non-concessional contributions move after-tax money into super
Non-concessional contributions are made from after-tax money. You do not claim a tax deduction for them.
Common sources include:
Personal savings
An inheritance
The sale of investments
Surplus cash after paying off debt
Money held outside super that you want to move into the retirement system
Because these contributions are made from after-tax money, they are not taxed again as contributions when received by the super fund.
The standard non-concessional contributions cap for the 2026/27 year is $130,000. Do not assume this to be the case in future years as caps can change each year. Eligibility also depends on age and total super balance.
If your total super balance is at or above the general transfer balance cap at the relevant time, your ability to make non-concessional contributions may be reduced or nil.
Example of a non-concessional contribution
Priya, age 58, receives $100,000 from the sale of a small investment portfolio. She has already paid any tax connected with the sale and does not want to claim a deduction for contributing the money.
If she is eligible, Priya may contribute the $100,000 to super as a non-concessional contribution.
This does not reduce her taxable income, but it moves money into the super environment. That may help her invest for retirement in a tax-effective structure, depending on her circumstances.
Bring forward rules allow larger after-tax contributions
The bring forward rule may allow eligible people to bring forward future non-concessional caps and contribute more in one year.
This can allow contributions of up to three years of non-concessional caps at once. Using the current cap of $130,000 annual cap, that could mean up to $390,000.
The bring forward rules are tied to:
You must be under 75 years of age at any time during the financial year you trigger the arrangement (specifically, under 75 on 1 July of the trigger year).
Your total super balance on June 30 of the previous financial year (see table above).
Whether you have already triggered a bring forward period.
The general transfer balance cap.
The non-concessional cap for the relevant year.
The closer your total super balance is to the general transfer balance cap, the less bring forward capacity you may have.
Example of a bring forward contribution
Liam is 62 and has $820,000 in super, so he is under the total super balance cap. He sells an investment property and wants to contribute some of the proceeds to super.
If eligible, Liam may be able to use the bring forward rule and contribute up to three years of non-concessional caps in one year.
If the annual non-concessional cap is $130,000, that could allow up to $390,000. But Liam needs to check whether he has triggered the bring forward rule in an earlier year and whether his total super balance affects the amount he can contribute.
This rule can work well when someone receives a lump sum before retirement. It can also help couples even out super balances, which may improve flexibility later.
Downsizer contributions can help after selling the family home
Downsizer contributions are designed for older Australians who sell an eligible home and want to contribute some of the proceeds to super.
Despite the name, you do not have to buy a smaller home. You do not have to buy another home at all.
The key features are:
You must be 55 or older at the time of contribution
The contribution must relate to the sale of an eligible Australian home
The home generally must have been owned for at least 10 years by you, your spouse, or a former spouse
The contribution must usually be made within 90 days of settlement
You must give your super fund the downsizer contribution form
The maximum contribution is $300,000 per person
A couple may be able to contribute up to $600,000 combined
It does not count toward the non-concessional contributions cap
It can be made even if your total super balance is too high for non-concessional contributions
The contribution still counts toward your total super balance after it is made. It may affect Centrelink entitlements, aged care fees, and future contribution options. The money also remains subject to super rules.
Example of a downsizer contribution
Maria and John are both 68. They sell their long-term home for $1.2 million and move to a smaller apartment closer to family.
If they meet the downsizer contribution rules, they may each contribute up to $300,000 to super from the sale proceeds. That is a combined $600,000.
This could significantly increase their retirement savings. It may also change how their money is assessed for Age Pension purposes, so they should seek advice before making the contribution.
Downsizer contributions are often most useful when people are asset-rich but want more flexibility in retirement income planning.
Choosing the right contribution starts with the goal
Each contribution type solves a different problem. A good decision starts with the reason for contributing.
Goal | Contribution type that may help | Why it may fit |
Reduce taxable income | Concessional contribution | May create a tax deduction or salary sacrifice benefit |
Catch up after low-contribution years | Carry forward concessional contribution | May allow larger deductible contributions |
Move savings into super | Non-concessional contribution | Uses after-tax money without claiming a deduction |
Contribute a large lump sum | Bring forward non-concessional contribution | May allow up to three years of caps at once |
Add sale proceeds from the family home | Downsizer contribution | Separate cap, available from age 55 if eligible |
The right contribution option often depends on timing. A contribution made before June 30 may have a very different result from one made in July. A home sale settlement date can affect downsizer timing. An employer bonus can change concessional cap planning. A total super balance just above or below a threshold can change what is possible.
Before contributing, check these details:
Your total super balance at the previous June 30
Contributions already made this financial year
Employer contributions still expected before June 30
Any unused concessional cap amounts
Whether a bring forward period has already started
Age-based contribution rules
Whether the fund can accept the contribution
Required forms and deadlines
Super contributions do not need to be overwhelming. Once the buckets are clear, the planning becomes much more practical.
Concessional contributions may help reduce tax. Carry forward rules may help you catch up. Non-concessional contributions may move after-tax wealth into the often more tax efficient super system. Bring forward rules may allow larger lump sums. Downsizer contributions may create a valuable opportunity after selling a long-term home.
The best next step is to check what cap space you have before you contribute. Feel free to reach out as a short planning conversation before June 30, before a property settlement, or before a large lump sum is invested, can prevent mistakes and open up options that are easy to miss.
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