Super is the forgotten gem in the finance world. It’s every band member of Coldplay that’s not Chris Martin. Extremely valuable, but no one thinks about them.

But if there’s one time you need to be thinking about your super, it’s the end of the financial year.

If you’re planning to make voluntary super contributions, understanding the timing of those contributions is critical to getting bang for your buck.

How voluntary contributions to super work

There’s two types of super contributions; before tax, and after tax. 

Before tax, also known as, concessional contributions are additional contributions you’ve made into your super as a lump sum, or via a salary sacrifice agreement with your employer. 

These contributions are taxed within your super fund at the ‘concessional’ rate of 15%.

After tax contributions or non-concessional contributions are those that you make into your super fund from your after-tax income. 

Because you’ve already paid tax at your marginal rate on these contributions, they’re not subject to additional tax in your super fund.

For tax deductions though, we’re mainly interested in after-tax (or non-concessional) contributions.

Contribution caps

As with all good things, there are limits to the government’s generosity, and therefore limits to the amount that you can contribute and claim.

For the 2023-24 financial year, before tax (concessional) contributions are capped to $27,500. 

And for after-tax (non-concessional contributions), the cap is $110,000 for the 2023-24 financial year.

If you choose to claim a tax deduction on your after-tax contributions, they’ll be treated as concessional contributions and count towards the $27,500 cap.

This cap also includes your employer contributions and any other salary sacrifice contributions you might have made.

So bear in mind how much super you’ve already contributed towards the cap when making decisions about additional contributions. 

Steps to claiming a tax deduction

Once you’ve put that money into your super, you’ll need to notify your superfund with a ‘intent to claim form’. 

Your fund will let you know when they’ve received your notice, and then you can go ahead and claim your deduction when you file your tax return.