Superannuation remains one of the best ways to reduce your tax and boost your retirement savings in the 2024/25 financial year.
Here’s a is a little information to help you understand how to get the most out of your super contributions.
1. Concessional (Before-Tax) Contributions – Up to $30,000 Cap
You can contribute up to $30,000 in before-tax contributions, which includes:
– Employer Super Guarantee (SG) contributions — now 11.5% of your ordinary earnings
– Salary sacrifice contributions
– Personal contributions you claim as a tax deduction
Why this matters: These contributions are taxed at 15% inside your super fund — often much lower than your marginal income tax rate (which can be up to 47%).
If your total super balance is under $500,000, you can also carry forward unused concessional cap amounts from previous years.
2. Government Co-Contribution – Up to $500
If you make personal after-tax contributions, you may get a government co-contribution of 50 cents for every $1 you contribute, up to $500.
To receive the maximum $500 co-contribution you need to:
– Earn $45,400 or less
– Contribute at least $1,000 of your own money to super
– Meet other eligibility criteria (work-related income, under 71 years old, super balance under $1.9 million)
Note: These contributions do not count towards the concessional cap but do count towards the non-concessional cap (currently $120,000).
3. Low Income Super Tax Offset (LISTO) – Refund of Contributions Tax Up to $500
If your income is $37,000 or less, you qualify for the LISTO — the government refunds the 15% contributions tax paid on your employer contributions. So if you are self employed or just starting it can effectively make contributions tax-free up to a limit.
Superannuation is a powerful tax strategy, especially when combined with government incentives. Whether you want to reduce your tax bill, build your retirement savings, or access free government contributions, it pays to plan now.