The end of the financial year is an ideal time to check the progress of your super savings, review any arrangements you have in place and ensure you’re making the most of tax incentives before 30 June.
1. Check your caps before contributing
Before you consider making extra contributions, it’s best to check how much you’ve already contributed to super in the financial year.
Concessional contributions for DB members
In a defined benefit fund, your employer usually contributes to the fund in general (rather than specifically for you). This is known as a notional taxed contribution.
Notional taxed contributions are calculated using a formula specified in legislation which generally represents the ‘contribution’ that is deemed to have been made by the employer to provide defined benefits or other benefits to employees.
Your total reportable concessional contributions for the financial year includes the notional taxed contributions made by your employer and any contributions paid into your Additional accumulation account (e.g. voluntary salary sacrifice contributions).
For more information about how your concessional contributions are derived, please refer to the Employer and Salary sacrifice contributions for DB members factsheet available at your plan microsite.
You can check your total concessional contributions in Member Online and via ATO online services at my.gov.au.
How much can you contribute?
Currently, eligible Australians are allowed to contribute up to $27,500 before tax and $110,000 after tax to super each year. These are known as the concessional (before tax) and non-concessional (after tax) contribution caps. If you exceed the caps, you may need to pay extra tax. See ato.gov.au for more details.
If you have the resources available and are eligible to contribute, and depending on your personal circumstances, making super contributions before tax are generally taxed at a concessional rate of 15%1, which is significantly lower than the average marginal tax rate of 32.5% plus the Medicare Levy of 2.0%2. By contributing to super, you’re able to keep more of your overall income, though it’s important to keep in mind you can’t access your super until you meet a condition of release like reaching age 65.
1An exception is the ATO charges 30% if your income plus super is more than $250,000 a year.
2Based on the ATO’s Average weekly ordinary time earnings (AWOTE), June quarter 2022, $1,769.80. This equates to an annual salary of $92,029.60 and a marginal tax rate of 32.5% plus the Medicare levy of 2.0%.
Find out more about concessional contributions.
2. Get your contributions in before 30 June
To ensure your super contributions count towards the 2022-23 financial year, they need to be received by your fund prior to the 30 June deadline.
At ART, we need to receive contributions before 5pm AEST on Friday 30 June 2023 for these to be count towards the 2022-23 financial year. We are unable to backdate contributions that we receive after this date.
3. Make a tax-deductible super contribution
If you pay after-tax money to your super (a personal/voluntary contribution), you can claim a tax deduction for it. It's a great way to save on tax if you're not able to salary sacrifice.
To claim a tax deduction, you need to make a personal contribution and tell us you want to claim a deduction before 30 June or before you lodge your tax return, whichever is earlier. Of course, check your contributions caps before making any changes.
Just follow the four steps listed here.
4. Boost your spouse’s super balance
More money for your partner’s retirement savings can mean a better financial future for both of you – and you can often save on tax.
A spouse contribution is when you pay money into your spouse or partner’s super account from your after-tax income. If they earn less than $40,000 a year or are not working right now,3 you may be eligible to claim an 18% tax offset of up to $540 if you add $3,000 to their super.
Find out more about spouse contributions.
3What they earn includes your spouse’s assessable income, total reportable fringe benefits, and reportable employer super contributions, less any amounts they’ve taken out of their super for a home deposit during the financial year.
5. Consider organising a salary sacrifice arrangement
Salary sacrificing to super is when you pay part of your salary into your super account before tax. It’s an extra payment on top of your employer’s compulsory SG contribution, and it’s different to adding after-tax money to your super.
If your employer offers salary sacrificing, the end of the financial year is an ideal time to set up a new arrangement as you may be able to organise for your first payment to be made at the start of the new financial year.
Find out more about salary sacrifice.
6. Revaluate your current salary sacrifice arrangement
If you already have a salary sacrifice arrangement in place, the end of the financial year is a great time to review it and ensure it continues to meet your needs. From 1 July 2023, the Superannuation Guarantee (SG) rate (the compulsory amount your employer pays to your super) is expected to rise from 10.5% to 11% p.a. Depending on your salary and how much you are salary sacrificing to super each pay, the SG increase may cause you to exceed the concessional contributions cap. SG is also scheduled to rise to 11.5% from 1 July 2024 and 12% from 1 July 2025, so it’s important to review your arrangement each year to avoid potentially paying extra tax. See ato.gov.au for more details.
Download our factsheet for more information on the changes to the SG rate.
7. Make a downsizer contribution
If you're 55 or over, you might be able to add up to $300,000 to your super tax-free when selling a property you've lived in. This is called a downsizer contribution to super.
If your spouse is also 55 or older, you can add up to $600,000 in total between the two of you.
It's a tax-free contribution even if only one of you is listed as an owner of the property.
Find out more about downsizer contributions.
8. Take advantage of co-contributions
If you earn under $42,016 in 2022-23, the government automatically adds 50c for every dollar you pay into your super after tax, up to a maximum $500 co-contribution.
This is called the government super co-contribution, and it can make a real difference to how much you retire with.
Find out more about co-contributions.