What are voluntary contributions?
A voluntary contribution is money that you add to your super from your after-tax income or other money that you can invest.
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Adding a little extra now could make a big difference in retirement
There are two types of voluntary contributions you can make to super
Voluntary contributions
Adding a little extra now could make a big difference in retirement
There are two types of voluntary contributions you can make to super
Voluntary contribution
Making a voluntary contribution from your after-tax income to your super, can be an effective way to grow your retirement savings. These are also called non-concessional contributions and you can choose to make a one-off or regular contribution depending on your circumstances and financial commitments. As this type of voluntary contribution is made from your after-tax income or savings, it won’t attract any contribution tax in your super fund.
Voluntary tax deductible contribution
If you’re employed, self-employed or earn taxable income from other sources (such as investments), making a voluntary contribution for which you claim a tax deduction can be an effective way to not only grow your retirement savings but also reduce your taxable income. Once you claim a tax deduction on these type of contributions, they form part of your concessional contribution limit. It is generally taxed by your super fund at up to 15% (and up to 30% if your income is over $250,000 pa) instead of your marginal tax rate, which may be up to 47%. So, depending on your circumstances, making a voluntary deductible contribution may result in a tax saving of up to 32%.
How does your super size up?
Take our two-minute super check and learn about saving for retirement along the way.
How do I claim a tax-deduction?
You will need to submit a valid Notice of Intent form to your super fund. You’ll also need to receive an acknowledgment from the super fund before you complete your tax return, start a pension, withdraw or rollover money from the fund to which you made your voluntary contribution.
For more information, or to determine if you’re eligible, visit the ATO website or speak with your registered tax agent.
Is a voluntary contribution right for me?
It could be, but first check that you’re eligible to contribute to super and that:
- Voluntary after-tax contributions count towards your non-concessional contributions cap and penalties may apply if the cap is exceeded.
- To make voluntary after-tax contributions in 2022/23, your total super balance must have been under $1.7 million on 30 June 2022.
- If you make a voluntary after-tax contribution to your super, you may be eligible for a Government co-contribution of up to $500.
- Voluntary deductible contributions will count towards your concessional contributions cap and penalties may apply if the cap is exceeded.
- And remember, you can’t access your super until you meet a condition of release such as reaching preservation age and retiring.
We’re here to help
If you value the experience of experts in other aspects of your life, don't discount it when it comes to your financial wellbeing, including your super.
A financial adviser can help you identify ways to grow your super. So, start the conversation to see how a financial adviser can help you. If you don’t have one, give us a call and we can help you find one near you.
Consolidating your super by bringing it together in one place can be one of the most effective ways to grow your super, by no longer paying multiple fees and potentially multiple insurance premiums.
If you can afford to give up some of your salary to grow your super, and your employer allows, you can arrange for ‘salary sacrifice’ contributions.
Do you have more super than your spouse? You could add to their super and both enjoy the benefits of less tax and more super for retirement.
There’s a solution if you feel like you’ve missed the boat when it comes to building your retirement savings due to expenses or time-out raising kids, study or parents’ aged care.
If you’re a lower or middle-income earner, you might be eligible to receive a Government boost to your super.
The downsizer contribution allows eligible Australians aged 55 or older to sell their home and contribute up to $300,000 of the proceeds into their super.
Important Information
The information on this web page is of a general nature only and has been prepared on behalf of the Trustee without taking into account your objectives, financial circumstances or needs. Before acting on any of this information, you should consider whether it is appropriate to your objectives, financial circumstances and needs, and seek appropriate professional advice. You should not rely on this information to determine your voluntary tax obligations, please consult a registered tax agent for this purpose.
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