Contributions to your super account are the building blocks of your retirement savings. Compulsory employer contributions are the foundation blocks, providing you with a degree of security in retirement. To build your super so that you can live the lifestyle you want in retirement, you should consider the different contribution options available to you.
Generally, contributions are considered to be 'concessional' or 'non-concessional'.
Concessional contributions are contributions made with pre-tax income. They are called concessional contributions because income directed to superannuation is taxed at a concessional rate – generally a lower rate than other income.
Concessional contributions are usually made by employers, on an employee’s behalf. They include:
Non-concessional contributions generally come from your after-tax income. They include:
Other contributions that may form an important part of your overall strategy are:
- Co-contributions - a Government contribution applicable to your voluntary contributions
- Low Income Super Tax Offset - a Government contribution applicable to your concessional contributions
- Super-splitting - splitting concessional contributions with your spouse
- Rollovers - combining your own super accounts
Please note: Limits apply on the amount of concessional and non-concessional contributions you can make each year. See the Contribution caps page for further information. For information on how contributions are taxed and what happens if you breach the caps, see Tax on Contributions.