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).

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.
• The receiving spouse's Total Superannuation Balance must be less than $2.0 million as of 30 June of the previous financial year (i.e., 30 June 2025 for 2025–26 contributions).

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.

The Government co-contribution involves the Government contributing to the super accounts of low and middle income employees and self-employed people to encourage and assist them to save for their retirement.

The maximum Government co-contribution is 50 cents for every $1 of eligible personal super contributions made in a financial year and is subject to an income test. The maximum co-contribution of $500 reduces by 3.333 cents for every $1 that the taxpayer’s total income exceeds $47,488 in 2025–26 until it reaches or exceeds $62,488. If the amount of the Government co‑contribution would otherwise be less than $20, the amount of the co‑contribution is rounded up to $20.

The Government co-contribution does not count toward either the concessional or the non-concessional contributions caps.

The ATO lists a full list of eligibility criteria on their website which can be accessed via the below link:

Super co-contribution | Australian Taxation Office (ato.gov.au)

Division 293 tax is an additional tax that applies to part or all of your concessional contributions (generally salary sacrifice, personal concessional or employer contributions) where your income and ‘low tax contributions’ for a financial year exceeds $250,000. Division 293 tax of 15% is levied on a your ‘taxable contributions’.

Taxable contributions are the lesser of:

• Your ‘low tax contributions’ (generally non-excessive concessional contributions) or
• Your Division 293 income amount, less $250,000.

Note: If you do not have any low tax contributions or if your Division 293 income amount (which includes low tax contributions) is less than $250,000, taxable contributions are nil and no Division 293 tax is payable.

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.

Let’s say your total super balance is $200,000 on 30 June 2025, and you haven’t made any concessional contributions in the past five financial years (from 2020/21 to 2024/25). This means you can carry forward the unused caps from each of those years and use them in 2025/26, as long as you're still eligible (i.e. your balance remains under $500,000 and you're under age 67 or meet the work test if over).

The concessional contribution caps for those years were:

• 2020/21: $25,000
• 2021/22: $27,500
• 2022/23: $27,500
• 2023/24: $27,500
• 2024/25: $30,000

Because you didn’t use any of these caps, the total amount of unused contributions you can carry forward into 2025/26 is $137,500.

In addition, in 2025/26 you can use that year’s standard concessional cap of $30,000 as well.

So, your total concessional contribution limit for 2025/26 would be:

$137,500 (carried forward) + $30,000 (current year’s cap) = $167,500

This is the maximum concessional contribution you can make in 2025/26 without exceeding the cap, assuming all other eligibility rules are met.

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

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.