EOFY super contribution countdown: there’s still time to add to your super
Key takeaways
- If you top up your superannuation balance before 30 June, you can pay less tax and boost your retirement savings.
- You can contribute up to $30,000 to your super each financial year (this includes your employer's contribution) with a tax rate of just 15%.
- What's next: Super funds have different cutoff dates to make voluntary contributions. Check yours first.
Topping up your superannuation with a personal contribution is never a bad idea. But it's particularly smart to do it before the end of financial year.
This way you can pay a little less tax and boost your overall super balance.
The tax benefits of voluntary contributions
Australians are allowed to contribute $30,000 a year to their super balance with a tax rate of just 15%. This includes the super you get paid via your employer.
That's a low tax rate, as most full-time workers get taxed at rates of 30%, 37% or even 45% at the highest levels.
This contribution cap resets each financial year.
Making an extra contribution has two benefits:
1. You pay less tax
Let's say you earn $120,000 a year. Every dollar you earn above $45,000 is taxed at 30%. So if you put $15,000 into your super, you'd pay half as much tax.
2. You grow your super balance
The more you add to your super fund, the more you have at retirement. And the earlier the better. Because the money in your super fund is invested, it grows over time.
A person with $100,000 in super at age 30 could retire with a lot more money than someone with $100,000 at age 40.
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By the numbers: the double win of super contributions
Let's use the example above. You earn $120,000 a year before tax, with no other income.
Using Moneysmart's tax calculator, you'd pay $26,788 in tax, plus $2,400 for the Medicare levy.
Now let's also assume your employer has paid you the standard 12% super for the year. That's $14,400.
This means you could add an extra $15,600 to your super (which equals $30,000 total).
If you added that full amount to your super, you'd pay 15% tax, or $2,340.
If it was just paid to you as part of your normal salary, you'd pay $4,680 in tax. So you've saved yourself $2,340 just like that.
Even better, that extra money will now work for you in your super for years and decades to come. You'll pay less tax and retire richer.
How to make a personal super contribution
- Figure out how much you can contribute to your super fund.
- Transfer the money to your super account (you can do this through your fund's app or online).
- Send a 'Notice of intent to claim' to your fund and wait for the fund to confirm.
- At tax time, you can claim the contribution as a tax deduction.
There are two things to watch out for:
- Don't go above the $30,000 cap. You'll end up paying more tax.
- Check your fund's deadline for personal contributions. It will be earlier than 30 June 2026. You may only have a couple of weeks.
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