Superannuation is basically your future money box. There are lots of ways to put money in, each with its own rules, tax perks and paperwork traps. Here’s the full menu so you can sound like you know what you’re doing.
Super money that gets a tax discount.
These are the contributions taxed at 15 percent when they hit your fund. They count toward the annual concessional cap (currently $30,000).
Types of Concessional Contributions:
💰 Superannuation Guarantee (SG): The compulsory percentage employers must pay for eligible employees.
💰 Salary sacrifice: You choose to tuck part of your wage straight into super before tax.
💰 Personal deductible contributions: You pay into your super from your bank account then lodge a notice with your fund that you want to claim a tax deduction. That tax deduction is then claimed in your personal tax return.
💰 Employer additional contributions: Extra super your employer pays on top of the SG that doesn’t reduce your wages or affect your take-home pay. They come out of the employer’s pocket, not your salary package. Different to salary sacrifice, which is taken from your wage before tax.
💰 Reportable employer super contributions (RESC): Not technically a type of contribution – more of a reporting term, that covers the amount paid to super by your employer that is over and above the superannuation guarantee amount. In simple terms, it’s Salary sacrifice + employer additional contributions.
👉 Why it matters: Concessional contributions are your tax-effective workhorse. If you’re trying to reduce taxable income or boost your retirement savings without losing half to tax, this bucket is your friend.
Money you’ve already paid tax on
These come from your after tax dollars. They aren’t taxed again when they hit your super account and count toward the $120,000 annual non-concessional cap.
Includes:
💰 Personal after tax top ups
💰 Proceeds from selling personal assets
💰 Gifts or inheritances you decide to pop into super
💰 Downsizer contributions for eligible retirees selling their home (does not count toward the cap but sits in this general category of “after tax style” contributions)
👉 Why it matters: This is how you supercharge your balance if you have spare cash, a windfall or a big life event.
The ATO’s version of slipping you a fiver…… for doing S.F.A.
If your income is under certain thresholds and you make a non concessional contribution, the government may kick in up to $500. You don’t apply. You just qualify and they quietly slip it into your fund after you lodge your tax return. Lovely. Who doesn’t like free cash from the government.
The couple’s teamwork option
You can make contributions to your spouse’s super and potentially score a tax offset of up to $540 if your spouse earns below the threshold.
Great for boosting your partner's super if they are out of the workforce or on a low income, whilst receiving a free $540 from the government. Again…. Who doesn’t like free cash from the government.
The “kids have moved out” top up
If you’re 55 or older and you sell your family home that you’ve owned for at least ten years, you can contribute up to $300,000 per person into super. Doesn’t count toward any cap. Huge option for retirement planning.
Super doubling as a savings account
Voluntary contributions (concessional or non-concessional) you make that you later withdraw to help buy your first home. The tax savings can be meaningful for younger staff, children or apprentices you employ.
Super contributions aren’t just a forced savings plan. They’re one of the most powerful tax tools you’ve got.
Get your categories right, keep an eye on the caps and use the strategies available and get as much free cash from the government as you can get. That’s how Future You walks into retirement with a grin.
– The team at PAL (making accounting slightly less boring since way back when)
Disclaimer: This article is here to give you general info only, not professional advice specific to your unique situation. While efforts are made to ensure accuracy, the content may change over time. We can’t take responsibility for any decisions based on the contents of this article, so be sure to chat with your accountant or advisor first!
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