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Did you know that by topping up your superannuation, you could potentially save money on taxes?
Let’s look into how this works and some conditions to be aware of if you’re considering voluntary contributions to boost your retirement savings this EOFY.
Superannuation—usually just called “super”—is your savings for retirement. It’s money that’s set aside while you’re working, so you’ve got something to live on when you stop.
Each time you get paid, your employer puts a percentage of your earnings into your super fund (11.5% for 1 July 2024 – 30 June 2025). That money gets invested, grows over time, and ideally sets you up for a comfortable life after work.
Generally, the more you have in your super account, the more freedom and peace of mind you might have down the track.
To give you an idea, the Association of Superannuation Funds of Australia (ASFA) Retirement Standard suggests that a single person needs around $51,805 per year (at December 2024) to retire comfortably, and around $73,077 for couples.
They might sound like big numbers, but with regular contributions and a few smart moves along the way, it can be an achievable goal over time.
EOFY can bring specific tax benefits tied to super contributions, and 30 June is your annual deadline to make the most of them.
Here are three things you might be able to do.
Putting some extra money into your super before the end of financial year (30 June) might help lower your taxable income. These are called concessional contributions and can include things like:
For the 2024–2025 financial year, the cap for concessional contributions is $30,000.
These contributions are usually taxed at 15% once they’re in your super fund. For some people, that’s less than what you might pay in income tax, which means you could end up paying less tax overall while growing your retirement savings!
Contributions above this limit may incur additional tax, so keeping track is key.
If you haven’t hit your super contribution cap in previous years, you might be able to carry forward unused cap amounts from the last five years to contribute more this year and potentially save more on tax.
This is known as the catch-up contributions rule, and EOFY is a great time to take advantage of it if you’re eligible. Learn more on the ATO website.
If you’re a low or middle-income earner and make an after-tax contribution to your super, you might be eligible for a super co-contribution – a top-up from the government for boosting your retirement savings.
Maximum amounts and eligibility criteria apply – find out more on the ATO website.
You can top-up your superannuation in two primary ways:
This is when you ask your employer to divert part of your pre-tax income into your super fund.
This not only grows your savings but can also reduce your taxable income, as these contributions.
If you’re in a position to add some extra funds into your super from your take-home pay (also known as non-concessional or after-tax contributions), it could be a handy way to grow your retirement savings over time.
These contributions come from money you’ve already paid tax on—like from your regular bank account. While they don’t reduce your taxable income like concessional (pre-tax) contributions, they can still boost your super balance and come with no contributions tax (since you’ve already paid income tax on the money you’re contributing).
If you’ve had a few jobs over the years, you may have more than one super account floating around. It’s a common thing—but having multiple accounts can mean you’re paying extra fees and possibly even losing track of your savings.
EOFY is a great time to tidy things up. Consolidating your super into one fund could help you:
You can check for lost or multiple accounts through the myGov website by linking your account to the Australian Taxation Office (ATO). From there, it’s easy to view all your super and roll it into one preferred fund.
Before consolidating, it’s a good idea to check if you’ll lose any insurance cover or benefits tied to your existing accounts.
EOFY is also a perfect moment to ask: Is your super fund working hard enough for you?
Here are a couple of things you might want to look at:
You can use the ATO’s YourSuper comparison tool to compare how funds stack up in terms of fees and returns.
Here’s a quick recap of smart steps you could take before 30 June to help your super go further:
Superannuation might not seem urgent now, but the small steps you take today could help you build a stronger foundation for retirement.
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