Before-tax contributions

You can boost your super by making before-tax contributions to your account or asking your employer to redirect some of your before-tax salary into your super. The main benefits, include paying less tax and growing your retirement nest egg faster.

Before-tax contributions (also known as concessional contributions) are contributions made with your pre-tax income. They are taxed at a concessional rate, which is generally lower than your marginal tax rate. Making additional before-tax contributions is a great way to boost your super, while paying less tax, so you can retire with more.

There are limits set by the Australian Government on how much you can contribute to your super. The before-tax (concessional) contribution cap is $27,500 per year. If the combined total of your employer and salary sacrificed contributions exceeds this cap, you could end up paying extra tax.

How to make before-tax contributions

Salary sacrifice

You can set up additional before-tax contributions that are deducted from your pay, known as salary sacrifice.

You will need to set up a salary sacrifice agreement with your employer. Make sure you clarify the terms to ensure your employer SG contributions are calculated on your full pre-tax income and that salary sacrifice will not impact entitlements like long-service leave.

If your employer doesn't offer salary sacrifice, you can make additional contributions from your take-home pay. If you claim these after-tax contributions as a tax deduction, they can also be converted into concessional contributions.

Employer contributions

Most before-tax contributions are made by your employer on your behalf. These may be paid at:

• The minimum legislated rate, known as the Superannuation Guarantee (SG)
• The minimum rate set by an industrial award or agreement
• A higher rate set by your employer

Super stapling

From 1 November 2021, your existing active super account will be ‘stapled’ to you and follow you when you move from job to job.

When you start a new job, your employer may need to request your stapled super fund details from the ATO. Your employer will still offer you a choice of super fund.

Head to the Super stapling explained page for more information.

Catch-up contributions

If your total superannuation balance is below $500,000 (on 30 June of the previous financial year) you may be able to take advantage of the 'carry forward' rule.

So how does it work?

Each financial year you can make before-tax (concessional) contributions up to your cap, which is currently $27,500. If you don't make before-tax contributions to your cap, you can carry forward this unused amount on a rolling basis for five years.

Effectively you're 'catching up' on the full amount you could have contributed in previous years.

The first year you will be entitled to carry forward unused amounts is the 2019-20 financial year. Unused amounts expire after five years.

Usually, any additional contributions above your cap are taxed at a higher rate, but catch-up contributions will be taxed at the concessional 15% in your super account.

For more information on the carry forward rule, visit the ATO website.

Low Income Super Tax Offset

The Low Income Super Tax Offset (LISTO) is a government payment that is designed to offset the 15% tax low income earners have paid on their superannuation contributions (including employer contributions).

If you earn $37,000 or less in a financial year and make before-tax contributions to a complying super fund, up to $500 may be paid to your super account.

The ATO will automatically workout your LISTO when you lodge your tax return and make the payment to your super account.

Please ensure you have provided Media Super your Tax File Number or you will not receive the payment.