Tax benefits from Voluntary Superannuation Contributions

How boosting your Super before 30 June can reduce your tax

When you retire, your superannuation is likely to become an essential source of your income. That’s why topping it up or contributing to it while you’re still working can be so powerful, not just for your future, but also for your current tax position.

What many people don’t realise is that voluntary superannuation contributions can provide immediate tax benefits, often taxing contributions at a lower rate than personal income tax.

In the lead‑up to 30 June 2026, there may be opportunities to reduce tax by reviewing how much you contribute to super and how those contributions are structured.

Our advisors have prepared this overview to explain how super contributions are taxed and how both low‑ and high‑income earners may benefit.

Please note: this is not financial advice. If you are interested in this strategy, please contact our office to speak with one of our licensed financial advisors before you do anything.

How Super Contributions are Taxed

1. Concessional (Before-Tax) Super Contributions

Concessional (before tax) super contributions include employer super contributions made on your behalf, any salary sacrifice contributions you make, or any personal contributions you claim a tax deduction on in your tax return.

These contributions are taxed at 15% when they are received by your super fund, up to a limit of $30,000 per year. Provided your annual earnings combined with superannuation contributions are less than $250,000 annually.

The people who would benefit the most are those who earn above $45,000 per year, as this is where the marginal tax rate plus Medicare Levy rises to 32%. Claiming a tax deduction on super contributions effectively makes your tax rate only 15%. That’s a big tax saving!

This approach is commonly used by:

• Individuals on higher marginal tax rates
• Those whose employer does not offer salary sacrifice
• Business owners making personal deductible contributions

2. Catch Up Super Contributions

If you have a total super balance below $500,000, you can carry forward unused concessional contribution cap amounts. Eligibility is based on your super balance at 30 June of the previous financial year.

This means if you do not use the full amount of your concessional contribution cap in a particular year, you may be able to carry forward unused amounts for up to five years, subject to eligibility criteria.

Carry-forward contributions are calculated on a rolling basis over five years, but any amount not used after five years expires. These carry-forward rules apply only to concessional contributions to super, not to non-concessional contributions, as they have different caps.

3. How low-income earners are taxed

If you’re a lower‑income earner, you may be eligible for additional government incentives, including:

• Low Income Super Tax Offset (LISTO):
  Refunds up to $500 of the 15% tax paid on concessional contributions, paid directly into your super account.
• Government co‑contributions:
  Eligible individuals making personal after‑tax contributions may receive up to $1,000 from the government, subject to income thresholds and contribution levels.

Eligibility thresholds change over time, so it’s important to confirm your entitlement each year.

4. How high-income earners are taxed  (Division 293 Tax)

If your income (including concessional super contributions) exceeds $250,000, an additional 15% tax may apply to some or all of your concessional contributions. This is known as Division 293 tax.

While this increases the total tax on those contributions to 30%, it is still often lower than the top marginal income tax rate of 47%, making concessional super contributions worthwhile for many high‑income earners.

Only the portion of contributions that causes your income to exceed $250,000 is subject to the additional tax.

5. Important timing for super contributions

If you’re planning to top up your super before 30 June, timing is critical.
For contributions to count in this financial year, you need to allow enough time for funds to be received and processed:

• Retail or industry super funds: Contributions should be made by 15 June 2026
• Self-Managed Super Funds (SMSFs): Contributions should be made by 25 June 2026

These earlier cut-off dates help ensure there is sufficient time for payments to clear the super clearing house and be allocated to your account before the end of the financial year. Missing these deadlines could mean your contribution is counted in the next financial year instead.

How Morrows Can Help:

Tax-effective superannuation strategies require careful planning. Our advisors will review:

• Your contribution caps
• Your total super balance
• Your income level
• Contribution timing
• Deduction eligibility

Getting the timing right is critical; contributions must be received by the super fund by 30 June 2026 to be deductible in the 2025–26 financial year.

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