Concessional contributions
Concessional (pre-tax) contributions can be a powerful way to boost your retirement savings.
How does it work?
Concessional contributions are generally taxed in the super fund at up to 15%view disclaimer1, instead of your marginal tax rate of up to a maximum of 47%view disclaimer2.
What are the benefits?
- Grow your super.
- Pay less tax on your salary or other taxable income.
Types of concessional contributions
There are three main types of concessional super contributions. These include:
- Superannuation guarantee contributions – which are the contributions that your employer is legally required to make for you. Generally these contributions are equal to 11.5% of ordinary time earnings.
- Salary sacrifice – where you arrange with your employer to contribute some of your pre-tax salary into super rather than receiving it as take-home pay, and
- Personal deductible contributions – these are personal contributions you make to super with your take home pay or other savings, which you claim as a tax deduction to reduce your taxable income.
Important things to consider
- To make or receive concessional contributions you must be eligible to contribute to super.
- Concessional contributions count towards a cap and penalties may apply if the cap is exceeded.
- You may also want to make non-concessional contributions.
- You can’t access your super until you meet a condition of release such as reaching preservation age and retiring.
Disclaimer1. If you earn up to $37,000 a year (2024/25) you may be eligible to receive a Low Income Super Tax Offset (LISTO) payment of up to $500. Individuals with income from certain sources above $250,000 in 2024/25 will pay an additional 15% tax on concessional super contributions within the cap. However, concessional contributions are generally still beneficial, as the tax payable on the concessional contribution is still less than the marginal tax rate of 47% (including Medicare levy) that is paid by people earning this level of taxable income.
Disclaimer2. Includes Medicare levy.
Got a question?
Get set in the right direction with help and guidance available over the phone, online or face-to-face.
General advice and information only
Any advice and information on this website is general only, and has been prepared without taking into account your particular circumstances and needs. Before acting on any advice on this website you should assess or seek advice on whether it is appropriate for your needs, financial situation and investment objectives.
Tax disclaimer
Any general tax information on this website is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.
Connect with us
Download the MLC app
