Catch up super contributions

For the first time this financial year there is a new opportunity to save for your retirement by making catch-up super contributions using the ‘carry forward’ rule.

From 1 July 2017, employees, as well as the self-employed, can claim a tax deduction on personal super contributions.

What are Concessional Contributions?

Concessional Contributions include super contributions made by your employer and your own personal concessional contributions to super. They are taxed at just 15% rather than your marginal tax rate. Generally, the cap on concessional contributions, each financial year, is $25,000."

Now, for the first time, you can ‘carry-forward’ the unused portion of your concessional contributions cap from last financial year and contribute it to super this financial year. This is possible as long as you have a total super balance of under $500,000.

Currently, only the unused concessional contribution cap amounts in the 2018/19 financial year can be carried forward. Then, for future financial years, they can be carried forward, on a rolling basis, for five years.

What are the benefits?

A larger concessional contributions cap means you have an increased opportunity to reduce your personal assessable income and your tax bill. By contributing more you’ll have more money invested in super and more money saved for retirement.


If you had a salary of $100,000 last financial year and your employer contributed $9,500 as compulsory super guarantee contributions and you didn’t contribute any additional contributions, you can carry forward $15,500 ($25,000 – $9,500) to this financial year. This gives you a total concessional contribution cap this financial year of $40,500 ($15,500 + $25,000). This assumes your total super balance is under $500,000. If your employer contributes the same amount this year, this leaves you with $31,000 to contribute to super using your own money which you can then claim as a tax deduction. The tax benefit of doing this is $6,795.

The table below shows the potential benefit of catch-up contributions for people on various incomes.

Catch-up concessional contributions this financial year


  • Total superannuation balance is less than $500,000 at 30 June 2019.
  • No other income is generated.
  • Employment income and 9.5% superannuation guarantee amount remains the same across the two financial years.
  • Concessional contribution cap remains at $25,000.
Employment incomeSuperannuation guarantee (9.5%)

Unused concessional contributions cap
($25,000 – SG)

Available concessional contributions cap (including unused cap from 2018/19)Taxation benefit if using available concessional contributions cap
$75,000 $7,125 $17,875 $35,750 $6,726
$100,000 $9,500 $15,500 $31,000 $6,795
$125,000 $11,875 $13,125 $26,250 $7,087
$150,000 $14,250 $10,750 $21,500 $5,160
$200,000 $19,000 $6,000 $12,000 $3,840

Beyond 2019/20

The opportunity and benefits of catch-up concessional contributions become more substantial beyond this financial year, but so does the complexity. Over the next five years, the maximum amount of unused concessional contributions you can accrue is $125,000 (5 x $25,000) because after five years, the first year’s unused cap expires. This means in the sixth year, if you haven’t used any of your concessional contributions you can contribute up to $150,000 ($125,000 + $25,000 for the current financial year).

Case study

Holly-Marie, age 62, retires early. Most of her retirement income is generated from an account-based pension and an investment property. In 2018/19 she had personal taxable income of $25,000 and paid $852 tax. No concessional contributions were made in 2018/19 and her total super balance at 30 June 2019 was $335,000.

In 2019/20 Holly-Marie has decided to sell her investment property and realises a net capital gain of $125,000 which increases her taxable income to $150,000 ($25000 from her account based pension plus capital gains of $125,000) and tax payable to $45,997. Holly-Marie could reduce her personal tax liability to $25,717 by making a personal concessional contributions to super of $50,000 by utilising $25,000 from her 2019/20 concessional contributions cap and $25,000 from her unused 2018/19 concessional contributions cap. After considering $7,500 ($50,000 x 15%) tax on contributions, Holly-Marie has reduced her overall tax liability by $12,780.

If you’ve accrued a carry-forward concessional contribution amount, you may want to start, or increase your salary sacrifice contributions or make a personal concessional contribution to super. This can be particularly beneficial for reducing your tax bill if you’ve significantly increased your income, for example, if you’ve sold an asset with a large capital gain as explained in the case study above.

Super contributions for older Australians

If you are aged between 65 and 74, you can also make contributions to super but you need to meet a work-test. To pass the work-test, you need to have been ‘gainfully employed’1 for at least 40 hours over 30 consecutive days during the financial year in which you plan to make the contribution. That’s just one week’s worth of full-time work in a single month.

Also, if you’re aged between 65 and 74 and have a ‘total super balance’2 under $300,000, you can make personal contributions to super in the first financial year in which you no longer meet the work test. This is likely to be the first year following your retirement.

Unfortunately, if you are 75 or over you are not eligible to make personal contributions to super.

Protecting your super legislation

The ‘protecting your super’ legislation came into effect from 1 July 2019 and is designed to protect people’s super balances. Make sure you’re well informed by reading our protecting your super legislation update.

If you have any questions on how to make the most of your super and optimise your tax position, please seek advice from your financial adviser. If you don’t have an adviser, we can put you in touch with one.

1 The ATO defines gainful employment as employed or self-employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment.
2 Your ‘total super balance’ is measured on 30 June of the previous financial year and is calculated by adding several items together, including both the accumulation and pension interests of your super.