Voluntary contributions including salary sacrifice
Add to your super and save
Will you have enough to enjoy the retirement you’ve been dreaming of?
It’s likely you’ll fall short if you’re just relying on your employer’s compulsory super guarantee (SG) contributions. That’s why it’s smart to add to your super while you’re still working - and the best way to do that is through voluntary contributions to your super account (called concessional contributions).
There are two ways to do this:
- Salary sacrifice payments
- Lump sum contribution you can make as a tax deduction.
These contributions are generally taxed at a flat rate of 15% in the fund and therefore they may be taxed at a lower rate than your normal income tax - which means you can save money now for the future*.
*Extra tax will apply to any amount paid into your super that’s over the limit. If your income including super is above $250,000 pa, you’ll pay 30% tax on your contributions.
The easiest way to make a concessional contribution is to ask your employer to pay some of your wage directly into your super. And don’t worry, it can be achieved without making major changes to the lifestyle you enjoy now.
However, there are limits on how much you can contribute each year. These caps are detailed below.
How to salary sacrifice
Have a chat with your employer about setting up salary sacrifice contributions.
At Statewide Super, we can accept your contributions if you’re:
- Under 67 years of age
- Between 67 and 75 years and have been gainfully employed for at least 40 hours in 30 consecutive days during the financial year in which you want to make the contribution.
Claiming a tax deduction
From 1 July 2017, anyone can make lump sum contributions to their super and then later claim a tax deduction for those contributions^.
This is great for making last-minute concessional contributions in June - just before the end of the financial year.
^Special rules apply to how much super you can claim a tax deduction for if, you make a withdrawal or rollover part or all of your super (including if you rollover your super to start a pension).
How do I make a lump sum contribution?
To make a voluntary concessional contribution, simply:
- Login to Statewide Super Online or call us on 1300 65 18 65 to get your personal reference number and the relevant online payment details
- Make your contribution electronically via BPAY, ensuring you leave enough time so that we receive it before 30 June, and
- If you wish to claim a tax deduction, submit an Intent to Claim a Tax Deduction form, available from the ATO website.
You will need to submit the Intent to Claim a Tax Deduction form on or before the date on whichever comes first:
- The day you lodge your income tax return, or
- Within 12 months of the financial year in which you make the contribution
How much can I contribute?
For the 2021-22 financial year, you can contribute up to $27,500 in voluntary concessional contributions during the financial year.
However, this cap includes any Superannuation Guarantee contributions made by your employer.
Always check your total contributions balance before making a lump sum payment to make sure you stay below the cap.
If I didn’t maximise my concessional contributions last financial year, can I utilise it this year?
If you had a total superannuation balance of less than $500,000 on 30 June of the previous financial year, and didn’t maximise your concessional contribution cap of $25,000, you may be entitled to contribute more than the general concessional contributions cap in the current financial year by carrying forward any unused concessional contribution cap amount (commenced from 1 July 2018).
The first year you will be entitled to carry forward unused amounts is the 2019–20 financial year. If you do not use your carry-forward concessional contribution cap amount during the following 5 years, your carry-forward concessional contribution amount will expire.
What if I go over?
If you do exceed the concessional contributions cap, the excess is included in your income tax return and taxed at your marginal tax rate. You can choose to withdraw some of the excess contributions to pay the additional tax.
If you want to contribute more than the above cap, you can always make a voluntary after-tax contribution. While these also have upper limits to how much you can contribute during a financial year, they are typically a lot higher.
*A higher rate of tax may be deducted if you do not provide your TFN to Statewide Super, or you have an income greater than $250,000 per annum. Read our ‘How super is taxed’ booklet for more information.
^If you are aged between 65 and 75 years you must have been gainfully employed for at least 40 hours in 30 consecutive days during the financial year in which you want to make the contribution.