Tax time is fast approaching — but there is still time to get your ducks in a row if your superannuation is on your list of admin tasks to tackle.

Tax agents say it is a good time to look at maximising your super, using something called 'concessional contributions', which can lower your taxable income while topping up your retirement savings.


The catch? You have to have the spare cash available (which is tough for many during this cost of living crisis).

Here's what it all means.

(Of course, this is just general information and if you need financial advice, please see a professional).


What are concessional contributions?

They are essentially a voluntary payment from your income before tax has been taken out.

Instead of being taxed at your marginal income tax rate, concessional contributions are taxed at the rate of 15 per cent.

There are limits on the total amount you can put into your super account each financial year (without paying a higher tax rate).

For the 2024/2025 financial year the total amount of concessional contributions you can make into super is $30,000 (this includes what your employer has contributed).


Who could benefit from this strategy?

It's a particularly valuable strategy for anyone earning over $45,000 says Andrew Gardiner, the spokesperson for the National Tax and Accountants' Association.

"In that case, the benefit of concessional contribution is it's tax deductible at their marginal rate, which is anywhere between 30-45 per cent," he said.

If you earn less than that, there is little tax benefit, since you will only be paying up to 16 per cent tax on your income anyway.

However, high income earners need to be very careful.

If you're earning more than $250,000 (which includes super contributions), you might be hit with an additional 15 per cent tax payable on their extra super contributions.

"The other type of taxpayer who can benefit substantially by making additional super contributions would be somebody who has abnormally large income in 2025, they might have a big capital gain from the sale of property or shares," said Mr Gardiner.

"What these people can do is make a concessional contribution, up to the cap, which would reduce their tax payable from their abnormally large income."


What if I've made no super contributions in past years?

If you're keen to pump up your super, you can also use unused cap amounts from previous years (if you have the cash, of course).

In super jargon, it's called 'carrying forward', where you tap into any unused cap amounts for the past five years.

To be eligible, you have to have less than $500,000 in your super account.

"This strategy can work very well for people who are re-entering the workforce after an absence, people who have been on maternity or paternity leave for instance, and have not made concessional contributions for a number of years," said Mr Gardiner.

"It allows them to top up in the current year an amount of up to $162,500. It's a nice way to jump start your superannuation if you've been out of the workforce and haven't made contributions for the past five years."
How do I work out what's already been paid into super?

If you decide you would like to make a concessional contribution, you have to do the calculations as to whether you've already reached the cap yourself.

Firstly, you need to check how much your employer has already paid into super, by asking them directly, or by contacting your super fund.

If you view your super balance on the tax office website, it may not be up-to-date, as funds are only required to report your account total annually.

The cap this year is $30,000.

So, if your employer has paid $12,000 into your super this financial year, you can contribute about $18,000 extra from your before-tax income and only pay 15 per cent tax on that amount.


How do I actually make the payment?

If you wanted to contribute a higher amount throughout the financial year, you could arrange to salary sacrifice more of your income to super through your employer.

However, if you are wanting to make a payment before the end of this financial year, you would have to make a personal super contribution (where you contribute directly to your super fund, then claim a tax deduction).

According to the Australian Tax Office, you must give your super fund notice in the approved form and receive an acknowledgement from the fund.

"If you're going down the path of making additional contributions, the money must be received by your super fund by 30 June," warns Mr Gardiner.

And it's worth checking with your super fund in case they enforce earlier cut off dates.

Disclaimer: The information in this article is general in nature. If you need personalised advice, please see a professional.
Written by Emily Stewart, ABC News.