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Types of contributions

There are two main categories of super contributions; concessional and non-concessional.

Concessional (pre-tax)

Superannuation Guarantee contributions

Generally, your employer is required to contribute a minimum of 9.5% of your gross salary to super. This is known as the Superannuation Guarantee. These contributions are made before any income tax is applied and taxed at 15%¹ when the contribution enters your super account.

Salary sacrifice

Many employers will allow you to contribute to super a regular percentage or one-off payment from your pre-tax income. These contributions are generally taxed at 15%¹, which is less than the average marginal tax rate – making it a great way to boost your super and reduce your current taxable income.

Self-employed contributions Even if you’re self-employed you can contribute to super. In fact, the taxation rules that apply for these contributions make super an equally good investment for the self-employed¹

Non-concessional (after-tax)

Personal contributions

You can also make your own after-tax contributions to super² While you can’t claim a tax deduction on these contributions, because you will have already paid income tax on this money, generally, no extra tax is added when it’s contributed to super or when taken as a benefit (subject to your preservation age).

Low income superannuation contribution (LISC)

The LISC is a government superannuation payment of up to $500 to help low-income earners save for retirement.
If your taxable income is $37,000 or less a year, you may be eligible to receive a LISC. Payment of the LISC will cease from 1 July 2017. For further information please refer to the ATO website.

Spouse contributions

Contributing to super on behalf of your spouse can be a tax-effective way² for a couple to save for retirement – particularly if your spouse is only working part-time or has a limited income. There is no limit to the amount you can contribute, provided the contributions do not exceed non-concessional contribution limits.

Government Co-contributions

If your taxable income is $49,488 or less in the 2014-15 financial year and you make personal contributions to your super, the federal government will contribute up to $0.50 for each $1 you contribute, to a maximum amount of $500. For current income thresholds and contribution rates please refer to the ATO website

For further information about tax and super visit www.ato.gov.au/super

¹ Subject to the maximum concessional contributions cap. The standard cap is $30,000 for the 2014-15 financial year, however, if you are aged 49 years or older on 30 June 2014, the cap is $35,000. Any contributions above this cap is taxed at the highest marginal tax rate and will count towards the non-concessional contributions cap.
² Subject to the non-concessional contributions cap of $180,000 for the 2014-15 financial year, or $540,000 over three years (subject to eligibility). Any contributions above this cap is taxed at the highest marginal tax rate.