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CONCESSIONAL SUPERANNUATION CONTRIBUTIONS

By Rebecca Dhillon

In the lead-up to the end of the Financial Year, over the next few weeks, we will highlight various contributions that can be made to boost your superannuation balance before 30 June 2025.

This week, we will be discussing concessional contributions.

Concessional contributions are pre-tax contributions. They include:

  • Super Guarantee (SG) contributions are made on your behalf by your employer. The SG contribution rate for the current Financial Year is 11.5% and will increase to 12% from 1 July 2025.
  • Salary Sacrifice contributions are where you arrange for your employer to contribute some of your pre-tax salary into superannuation rather than receiving it as take-home pay.
  • Personal deductible contributions are made by you into superannuation, which you claim as a tax deduction to reduce your taxable income when completing your tax return.

The concessional contribution cap for the current Financial Year is $30,000 and will remain unchanged from 1 July 2025.

Concessional contributions are taxed at 15% within superannuation. For individuals with an adjustable taxable income position above $250,000 (total income including super contributions), an additional 15% tax is payable on contributions (Division 293).

Anyone under the age of 75 can make concessional contributions. However, individuals aged 67–74 must meet the work test before making a personal deductible contribution. Only SG contributions can be made once over the age of 75.

Work test and work test exemption:

To satisfy the work test, you must work at least 40 hours during a consecutive 30-day period during the Financial Year. However, if you don’t meet the work test, you may be able to use the work test exemption if you:

  • Satisfied the work test in the income year preceding the one in which the contribution was made
  • Have a total super balance of less than $300,000 as of 30 June of the previous Financial Year
  • Not used the work test exemption in a previous Financial Year

Topping up your superannuation balance by making additional contributions can make a big difference to your superannuation balance at retirement. Salary sacrifice and personal deductible contributions will reduce your assessable income position, reducing the amount of personal tax you pay.

Carry Forward Contributions

For individuals who have not utilised their full concessional contribution caps in previous Financial Years, you can ‘carry forward’ the unused amount to subsequent years.

To be eligible to make carry forward concessional contributions, an individual must:

  • Have a total superannuation balance of less than $500,000 as of 30 June of the prior year;
  • Be under age 67 or if between age 67 – 75 meet the work test

Any unused concessional contributions can only be carried forward for five years, after which they expire, as shown in the table below:

As the carry-forward contribution is based on a rolling five-year period excluding the current financial year, any carry-forward contributions from the 2019/20 Financial Year that are not used by 30 June 2025 will expire.

If you believe you are eligible to make these contributions and want to discuss the specifics of your situation, please reach out to your adviser.

Rebecca Dhillon
Senior Para-Planner
Authorised Representative No. 453075

If you have any questions or comments, please email me at rebecca@gfmwealth.com.au

Disclaimer: This document is not an offer or invitation to any person to buy or sell any interest in or deposit funds with any institution.  The information here is of a generic nature, and does not take into account your investment objectives or financial needs.  No person should act upon this information without firstly seeking competent, professional advice specifically relating to their own particular situation.

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