For the 2022/23 financial year, most taxpayers can make up to $27,500 in before-tax contributions to super
If you’re under 75, and depending on your total super balance, you may be able to make up to $330,000 in after-tax contributions to super
If you’re 60 or over, you may be able to make a tax-free contribution to your super of up to $300,000 ($600,000 for couples) using the proceeds from the sale of your main residence
Knowing the maximum amount you can contribute into super each year, can help you avoid paying unnecessary tax or penalties. It also means you can maximise your super for your retirement.
In this article we look at how much you can put into super based on the standard contribution limits, and the exceptions where you may be able to contribute more.
Super contribution caps
There are two main types of contributions you can make into super, before tax (concessional) and after tax (non-concessional).
Each has their own contribution caps which can often change. If you exceed these limits, you may be subject to additional taxes or penalties.
Before-tax super contributions caps
A before-tax super contribution is money that you or your employer put into super which has not been taxed, also known as concessional contributions.
You can make before-tax contributions through your employer by asking them to pay part of your salary into super. This is also known as a salary sacrifice arrangement.
For the 2022/23 financial year, you can generally make up to $27,500 in before-tax contributions to super. It’s important to note that this amount includes the mandatory contributions your employer pays on your behalf, as well as your own contributions which may be salary sacrificed or those you claim as a personal tax deduction. If you have more than one fund, all concessional contributions made to all your funds are added together and counted towards your concessional contributions cap of $27,500.
When your before-tax contributions enter your super account, your super fund will apply a 15% contributions tax. This is then paid to the Australian Taxation Office.
Before-tax super contribution caps exceptions
There is a way you may be able to contribute more before-tax contributions by carrying forward your unused concessional caps from previous financial years.
You can carry forward any of your unused before-tax contributions cap amounts for up to five years starting from the 2018/2019 financial year. This means if you don’t use the full amount of your concessional contributions cap in a particular year, you can carry forward the unused cap amount and take advantage of it up to five years later.
However, you are only able to use the carried-forward rule if your total super balance was below $500,000 on 30 June of the previous financial year.
After-tax super contributions caps
You can also make extra contributions into your super from your after-tax pay or existing savings. These are called non-concessional contributions because you’ve already paid tax on the money.
If you’re under 75, and your total super balance is less than $1.7 million at the prior 30 June, you can generally make up to $110,000 in after-tax contributions.
One of the main benefits is you don’t have to pay a 15% contributions tax when the money enters your super account. The tax rate on any investment earnings you make from that contribution, is also taxed at a maximum of 15%. This is often a lot lower than the tax you would personally pay on investment earnings outside super.
If you’re a low or middle-income earner, and make an after-tax contribution, you may qualify for a Government co-contribution payment of up to $500. To be eligible, you must not have exceeded your after-tax contributions cap in the relevant financial year.
After-tax super contributions cap exceptions
If you’re under 75 and meet all the eligibility requirements, you may be able to bring forward up to two additional years of after-tax contributions caps. This means you can make a higher contribution in a single year (currently up to $330,000 in one year).
However, the amount you can contribute using the bring forward rule depends on your total super balance, as per the table below.
Total superannuation balance at 30 June of the prior financial year
Maximum contribution you can make
$0 to less than $1.48 million
$1.48 to less than $1.59 million
$1.59 million to less than $1.7 million
$1.7 million and over
If you’re 60 or over, you may be able to make an after-tax contribution to your super of up to $300,000 ($600,000 for couples) using the proceeds from the sale of your main residence. This is known as a downsizer contribution.
To be eligible to make a downsizer contribution, you or your spouse must have owned your main residence for 10 years or more prior to the sale. Your residence must be located in Australia and cannot be a caravan, houseboat, or other mobile home.
One of the main benefits of downsizer contributions is they don’t count towards the before and after-tax super contribution caps.
However, downsizer contributions will count towards your transfer balance cap. The transfer balance cap applies when you move your super savings into retirement phase and limits the amount that can be used to commence a pension in retirement phase. The transfer balance cap is currently $1.7 million and is reviewed each financial year.
Important information and disclaimer
This article has been prepared by NULIS Nominees (Australia) Limited ABN 80 008 515 633 AFSL 236465 (NULIS) as trustee of the MLC Super Fund ABN 70 732 426 024. NULIS is part of the group of companies comprising Insignia Financial Ltd ABN 49 100 103 722 and its related bodies corporate (‘Insignia Financial Group’). The information in this article is current as at November 2022 and may be subject to change. This information may constitute general advice. The information in this article is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider obtaining independent advice before making any financial decisions based on this information. You should not rely on this article to determine your personal tax obligations. Please consult a registered tax agent for this purpose. Opinions constitute our judgement at the time of issue. The case study examples (if any) provided in this article have been included for illustrative purposes only and should not be relied upon for decision making. Subject to terms implied by law and which cannot be excluded, neither NULIS nor any member of the Insignia Financial Group accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in the information in this communication.