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Any rates and information listed are current at the date of writing (June 2024) and may change.

Superannuation ('super') is money set aside to provide for your retirement.

For most people, super begins when you start work and your employer starts paying ('contributing') a portion of your salary or wages into a super fund for you. Usually, super money is not accessible before a certain age (called a Preservation Age).

Super funds invest your super in many things, such as shares and property, with the aim of growing it so you have more when you retire.

Super contributions

The types of payments (contributions) into your super include:

  1. Employer contributions
  2. Salary sacrifice
  3. Personal contributions
  4. Spouse contributions
  5. Downsizer contributions
  6. Government co-contribution

As contributions paid by your employer are taxed, these are referred to as being 'concessional' contributions. These include salary sacrifice and any tax-deductible contributions. As the money you use to make personal and spouse contributions is taxed before you make the contribution, these contributions are referred to as 'non-concessional'.

Caps (limits) apply to the amount of super contributions you can make or receive each financial year before there are tax implications.

Most employees will receive a Superannuation Guarantee (SG) contribution from their employer. From 1 July 2024 this is equal to 11.5% of your salary and wages.

Generally, you are eligible for the 11.5% SG if you are:

  • aged 18 years and over
  • working full-time, part-time or on a casual basis.

Individuals aged under 18 may also be eligible for super if they work full-time, part-time or on a casual basis for 30 hours or more in a week.

Employers can make extra contributions, additional to SG, at their discretion.

Salary sacrifice is an arrangement between you and your employer whereby you choose not to receive some of your salary as cash but instead have it paid to your super fund as a before tax contribution. This reduces your taxable income, whilst increasing your super savings for retirement.

Instead of taking your full salary taxed at your marginal rate, you can nominate a portion of your 'before tax' money to go straight into your super fund. The super fund is generally taxed at a lower rate (max. 15%) instead of your marginal rate, which can be as high as 45% (plus Medicare levy).

  • A personal (after tax) contribution is a contribution to your super fund for which a tax deduction is not claimed. It enables you to contribute a sum of money for which no contribution tax is incurred and therefore the whole amount is invested.
  • When you draw these funds out of super, either in a lump sum or as income, no tax is charged on this portion of your super.
  • You may have the option to claim personal contributions as a tax deduction.

At any age, you can make contributions to your spouse's super if:

  • your spouse is under age 75
  • the contribution is made to a complying super fund, and
  • you are both Australian residents and are Australian taxpayers. The spouse contribution tax offset provides a tax offset of up to $540 for a contributing spouse where they make eligible spouse contributions of up to $3,000.

To be eligible for the offset, your receiving spouse must have total income (assessable income, reportable fringe benefits amounts and reportable employer super contributions) not exceeding $37,000 in order for you to receive the maximum offset – a partial offset may apply where your receiving spouse has a total income between $37,000 and $40,000.Caps on employer, salary sacrifice, and tax deductible contributions.

Clients aged 55 and older are able to contribute proceeds from the sale of their home to super. A client can contribute up to $300,000 regardless of their age, work status or total superannuation balance. It is not considered a concessional or non-concessional contribution, rather it is its own class of contribution, a downsizer contribution.

In the case of a couple selling their home, they can contribute $300,000 each ($600,000 total) into super from the proceeds of the sale of their home that has been owned for at least 10 years and the disposal must be exempt or partially exempt from capital gains tax as Downsizer contributions.

Downsizer contributions impact your Total Super Balance and Age Pension eligibility and it is highly recommended to seek professional advice in relation to Downsizer contributions and the potential impact on your financial circumstances.

Caps on employer, salary sacrifice, and tax deductible contributions

Concessional contributions (including employer, salary sacrifice and personal contributions that meet the tax-deductible circumstances) are capped at $30,000 per year (from 1 July 2024) for everyone (regardless of age).

If you go over the concessional cap, your excess contributions will be included in your assessable income and taxed at your marginal tax rate.

To assist you in paying the additional tax bill, you may release up to 85% of the excess concessional contributions from your super fund. You can only release up to 85% because 15% contributions tax has already been paid by your super fund.

Released contributions will no longer be counted as non-concessional contributions. You will receive a 15% tax offset for this in your tax return.

You can make catch-up concessional contributions into your super using your unused concessional contributions cap amounts from previous years if:

  • your total super balance is less than $500,000 on 30 June of the previous financial year, and
  • you haven't used all your concessional contributions cap amounts that have accrued from 1 July 2018 onwards. You can carry forward up to five years of unused concessional contributions caps for use in a later financial year, but the rolled forward amounts expire after five years.

For example, if you have a total super balance of $200,000 and do not receive any concessional contributions in any of the previous 4 financial years, in the 2024/25 financial year you can receive concessional contributions up to the combined caps of the 2021/22, 2020/21 and 2019/20 years (i.e. $27,500 cap for 2023/24 + $27,500 cap for 2022/23, $27,500 for 2021/22 and $25,000 for 2020/21  = up to $107,500 of combined 'catch-up' caps).

If you're aged 67 or over, the normal work test rules apply (see below).

For personal and spouse contributions (non-concessional contributions):

Anyone under the age of 75 can contribute up to $120,000 per year (from 1 July 2024) into super (or can contribute up to $360,000 in one year under the 'bring forward' rule –see below).

The bring forward rule allows you to bring forward any unused non-concessional cap amounts for up to a total of three financial years. E.g. You can choose to forego making personal contributions for the following two financial years after making your original contribution (i.e. $120,000 for year 1 + $120,000 for year 2 + $120,000 for year 3 = $360,000).

The amount you can bring forward is determined by how much you currently have in super as set out in the table below.

Total Super Balance At 30 June Prior To Financial Year

Contribution And Bring Forward Available

Less than $1.66 million

3 years ($360,000)

At least $1.66 million but less than $1.78 million

2 years ($240,000)

At least $1.78 million but less than $1.9 million

1 year ($120,000)

At least $1.9 million

Nil

Exceeding the $1.9 million threshold is allowable if you make a contribution using the bring forward rule as shown above, but no further after-tax contributions can be made once your total super balance is above that $1.9 million threshold.

If you make personal super contributions, you will have the option to claim a tax deduction.

This will allow you to have the flexibility to make concessional contributions either via salary sacrifice (if allowed by your employer) or personal tax-deductible contributions. This flexibility could assist you with:

  • end of year super top-ups by making personal concessional contributions to use up any remaining concessional contribution cap
  • deciding how to contribute bonuses, annual leave and long service leave
  • contributing lump sum leave payments received upon termination of employment tax-effectively.

After claiming a tax deduction on your personal contributions, concessional contribution caps will apply to the amount claimed.

If you exceed the maximum non-concessional cap, you may choose to withdraw the contributions in excess of the non- concessional contribution cap plus 85% of any associated earnings.

The associated earnings withdrawn are taxed at your marginal tax rate. You will also be entitled to a 15% non-refundable tax offset of the associated earnings included in your assessable income.

If you choose not to withdraw your excess non-concessional contributions, they will remain in your super account and your excess non-concessional contributions will be taxed at 45% (plus the Medicare levy).

When you reach age 67, you can only claim a tax deduction for a contribution made to super if you work more than 40 hours over 30 consecutive days in that financial year. The work test previously applied to other types of contributions such as non-concessional contributions however this was abolished from 1 July 2022.

You can claim a tax deduction on contributions made into your super account without needing to satisfy the work test if:

  • You are aged 67 – 74
  • Have less than $300,000 in your super account at the end of the previous financial year, and
  • They're made in the financial year immediately after the one in which you last met the work test.

Contribution splitting

The government allows super fund members to split up to 85% of concessional contributions (i.e. all employer contributions including superannuation guarantee, salary sacrifice and member concessional contributions).

Where the fund provides a contribution splitting service (this is not compulsory), members will need to apply to the Trustee after the end of each financial year to split contributions made in the previous financial year, or for contributions in the current year, at the time of a full rollover.

It is important to note that Trustees will only process a splitting request where the receiving spouse has not already met a condition of release (i.e. reached age 65 or retired after reaching preservation age).

In the case of member concessional contributions, the tax deduction will be claimed by the contributing member.

The contributing spouse is subject to their concessional contributions cap.

When can I withdraw my super?

You are able to access your super when you attain preservation age and satisfy a condition of release.

From 1 July 2024, age 60 is the preservation age for everyone.  

To satisfy a condition of release of your super benefits, you must:

  • be permanently retired (i.e. working less than 10 hours per week) on or after your Preservation Age, or
  • have ceased work with an employer (e.g. changed jobs)after age 60,or
  • have reached age 65.

Tax consequences of withdrawing super

When super contributions are made, they have usually been taxed either by the contributions tax for concessional contributions, or at your marginal tax rate before you make a non-concessional contribution. In rare circumstances (e.g. constitutionally protected funds), some contributions are untaxed until you wish to withdraw your super. This means your balance can contain both taxed and untaxed elements.

Upon withdrawing your super benefits, the monies are broken into two components, tax free and taxable.

When withdrawing your funds from super, the taxable and tax free components are taken in proportion to the total balance.

The tax free component generally consists of personal contributions and amounts which represent the portion of a super benefit that accrued before 1 July 1983.

The taxable component is the total value of the super benefit less the tax free component and is primarily made up of employer and salary sacrifice contributions.

Tax Treatment (Excluding Medicare Levy)

Age of client at time of payment

Taxed element

Untaxed element

Under preservation age

  • 20% tax
  • 30% tax on amounts up to the untaxed plan cap*
  • 45% tax on the remaining amount

Over preservation age (i.e. over 60)

  • Tax-free
  • 15% tax on amounts up to untaxed plan cap*
  • 45% tax on the remaining amount
* Untaxed plan cap = $1,780,000 for 2024/25 financial year

Togethr Financial Planning Pty Ltd (ABN 84 124 491 078, AFSL 455010) trading as Equip Financial Planning and Catholic Super is a subsidiary of Togethr Holdings Pty Ltd (ABN 11 604 515 791).  It is a related entity to Togethr Trustees Pty Ltd (ABN 64 006 964 049, AFSL 246383), the trustee of the Equipsuper Superannuation Fund (ABN 33 813 823 017) whose divisions include Catholic Super.

This information is general information only. It has been prepared without taking into account your personal investment objectives, financial situation or needs. It is not intended to be, and should not be construed in any way as, investment, legal or financial advice.

© 2023 Togethr Trustees Pty Ltd ABN 64 006 964 049 AFSL 246383 — *Past performance is not an indication of future performance
We acknowledge all First Peoples of the beautiful lands on which we live and work, and their enduring knowledge and connections to Country. We honour the wisdom of and pay respect to Elders past and present.