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Home / How super works / Super contributions

Concessional super contributions guide (2020/21)

June 22, 2020 by SuperGuide Leave a Comment

Reading time: 7 minutes

On this page

  • What is a concessional super contribution?
  • What types of contributions are concessional?
  • What is the concessional contributions cap?
  • What if I don’t use all my annual contributions cap?
  • What happens if I exceed my concessional contribution cap?
  • Am I eligible for concessional contributions?

For most Australians, concessional contributions are the most common type of contributions appearing on their annual super fund statement.

Despite this, many people still don’t understand what concessional contributions are, or whether they’re eligible to receive them.

To help you learn more about these important super contributions, check out SuperGuide’s guide to concessional contributions.

What is a concessional super contribution?

Concessional contributions are any of the contributions paid into your super account that receive a concessional (or lower) tax rate. They are contributions made into your account from money that has not yet been taxed – so it’s before tax. That’s why concessional contributions are sometimes referred to as being before-tax contributions.

Concessional super contributions are taxed at the special low rate of 15% (if your income is under $250,000) to help you save for your retirement. For many people, this tax rate is lower than the marginal or top tax rate they pay on their income.


Need to know: If your income plus any concessional (before-tax) super contributions totals more than $250,000 in a particular financial year, you may be liable for additional tax on some or all of your concessional contributions.

This Division 293 tax is payable in addition to the normal 15% contributions tax you pay when your concessional contributions enter your super account. For more information, read SuperGuide article How the Division 293 tax works: Super surcharge for high earners.


What types of contributions are concessional?

There are several types of concessional (before-tax) contributions, but the most common ones are the contributions made by your employer into your super account and salary-sacrifice contributions.


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From 1 July 2017, concessional (before-tax) contributions include:

1. Superannuation Guarantee (SG) contributions

These are the compulsory contributions made by your employer into your super account as part of your pay. In 2020/21, the SG is 9.5% of your ordinary time earnings (OTE).

Your employer is required to pay SG contributions on your earnings up to an income limit. The maximum super contribution base for 2020/21 is $57,090 per quarter, which is equivalent to $228,360 a year.

If you earn above this quarterly limit, your employer does not have to make contributions for the part of your earnings over the limit. For more information, read SuperGuide article Your simple guide to Superannuation Guarantee (SG) contributions.

2. Award contributions

These contributions are specified in some Employment Awards or Agreements and are paid by your employer. The amount of these super contributions depends on the individual Employment Award or Agreement (EA) certified by an industrial authority like the Fair Work Commission.

3. Additional pre-tax contributions made by your employer

These are contributions above the compulsory amount required by the SG legislation or EA. They are generally paid to employees of large companies as part of their salary package, or to some public sector employees.

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4. Salary-sacrifice contributions

You are able to make an agreement with your employer to pay part of your before-tax salary directly into your super account. You decide how much you want your employer to pay into your super account each pay cycle from your before-tax income.

Salary-sacrifice contributions can be made up to age 67, but if you are aged between 67 and 74 you need to pass a work test. For more information, read SuperGuide article Salary sacrifice and super: How does it work?

5. Personal contributions for which you claim a tax deduction

Since 1 July 2017, most people can claim a tax deduction for any personal contributions they make into their super account.

You are free to make a personal contribution at any time during the financial year and claim a tax deduction in that year’s tax return. For more information, read SuperGuide article How do tax-deductible superannuation contributions work?

6. Notional taxed and unfunded defined benefit contributions

If you are a member of a defined benefit super fund (including constitutionally protected funds), notional taxed contributions reflecting the increase in your super benefits for the year are considered the equivalent of an employer contribution. For more information, read SuperGuide article What are defined benefit super funds?

7. First Home Super Saver (FHSS) Scheme contributions

If you are saving to buy your first home through the FHSS Scheme, your contributions can be either concessional (before-tax) contributions or after-tax contributions. For more information, read SuperGuide article How does the First Home Super Saver (FHSS) Scheme work?

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Need to know: If you split your concessional (before-tax) contributions and transfer some into your spouse’s super account, the contributions are still counted towards your concessional contributions cap.


What is the concessional contributions cap?

As there are tax benefits in holding savings in your super account, the government places a strict annual cap (or limit) on concessional (before-tax) contributions going into super.

The cap applies to the total of all your super accounts across different super funds.

The concessional contributions cap is indexed and any contributions over this limit are subject to extra tax (see section below). From 1 July 2017, the cap is indexed in line with average weekly ordinary time earnings (AWOTE), in increments of $2,500 (rounded down).

Concessional contributions caps in other financial years

Income year
Effective date
Your age at this date
Your concessional contributions cap
2020/21All ages$25,000
2019/20 All ages$25,000
2018/19 All ages $25,000
2017/18

All ages

$25,000

2016/17 30 June 2016 Below 49 $30,000
49 and over$35,000
2015/16 30 June 2015 Below 49 $30,000
49 and over$35,000
2014/15 30 June 2014 Below 49

$30,000

49 and over$35,000
2013/14

30 June 2013

Below 59 $25,000
59 and over$35,000

Source: ATO

Once concessional contributions are in your super account, a 15% contributions tax is applied to the money by your super fund.

It’s important not to exceed your annual concessional contributions cap, as you may have to pay extra tax if you do. The actual amount of tax depends on your age and the financial year in which your concessional contributions were made, but it’s generally your marginal tax rate plus an interest charge.


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Need to know: If you go over your concessional contributions cap, the ATO will issue you with an excess concessional contributions determination and advise you what actions you can take.

For more information see SuperGuide article What to do if you exceed your super contributions caps.


What if I don’t use all my annual contributions cap?

From 1 July 2017, the super rules were changed to allow you to roll forward any of your unused concessional contributions cap. This means if you don’t use the full amount of your contributions cap in a particular year, you can carry forward the unused cap amount and take advantage of it up to five years later.

For more information see SuperGuide article Carry-forward contributions: How your unused contributions cap can help you catch up. 

What happens if I exceed my concessional contribution cap?

It’s important to keep track of the amount of your concessional (before-tax) contributions and when they are received by your super fund to avoid going over your concessional contributions cap and potentially paying extra tax.

It’s up to you – not your super fund or the ATO – to keep track of all the concessional contributions made by both you and your employer into your super account.

Although your employer may pay your salary regularly (such as fortnightly), it is not required to make SG contributions into your super account at the same time. In fact, it has until 28 days after the end of each quarter to make SG payments.

Financial year quarter End date of quarterDeadline for SG contributions
Q1 (July – September)30 September

28 October

Q2 (October – December)

31 December

28 January
Q3 (January – March)31 March 28 April
Q4 (April – June) 30 June

28 July

When working out your concessional contributions for the financial year, it’s important to remember contributions don’t count when the payment is sent. They only count once the contribution payment is received by your fund.


Need to know: If your employer doesn’t pay your SG contributions for the April to June quarter (ending 30 June) into your super account until 28 July, these contributions will be counted towards your concessional contributions cap for the following financial year.


Am I eligible for concessional contributions?

For you or your employer to make concessional contributions into your super account, you must meet the following eligibility criteria:

1. SG contributions by your employer

  • Employment: Generally, you are entitled to SG contributions from your employer when you are aged over 18 and paid $450 or more (before tax) in a month. This applies whether you are full time, part time, casual or a temporary resident. If you are aged under 18, you must work a minimum of 30 hours a week to be entitled to SG contributions.
  • Age: If you are entitled to SG contributions from your employer, they can be accepted by your super fund whatever your age.

2. Award and additional pre-tax contributions by your employer

  • Employment: If you are employed under an Employment Award or Agreement (EA) certified by an industrial authority and it specifies you are eligible for super contributions, you may still be eligible if you are aged 18 and working less than 30 hours a week, or are aged 75 and older and not eligible for SG contributions.
  • Age: If you are entitled to award contributions from your employer, they can be accepted by your super fund whatever your age.

3. Salary-sacrifice arrangement

  • Employment: To negotiate a salary-sacrifice arrangement with your employer, your employer must be willing to enter into this type of arrangement. If your employer is not prepared to enter into this type of arrangement, you cannot force them to agree.
  • Age:
    • If you are under 67, you are eligible to make salary-sacrifice contributions into your super account.
    • If you are 67 to 74, you must pass the work test (be ‘gainfully employed’ for at least 40 hours in 30 consecutive days during the same financial year) or be eligible for the work test exemption.
    • If you are aged 75 and over, you are not permitted to make salary-sacrifice contributions.

For more information on the work test, read SuperGuide article Work test: Making super contributions over 67.

4. Personal contributions for which you claim a tax deduction

  • Employment: From 1 July 2017, you are eligible to make a personal contribution regardless of your employment arrangement. Your income can come from salary and wages, a personal business, investments, government pensions or allowances, super, partnership or trust distributions and a foreign source.

Good to know: Prior to 1 July 2017, tax deductions for personal contributions into your super account were only available to people earning less than 10% of their income (assessable income, reportable fringe benefits and total reportable employer super contributions) as an employee.

This meant the deduction was generally only available to people who were fully self-employed.


  • Age:
    • If you are under 67, you are eligible to make a personal contribution into your super account and claim a tax deduction. (If you are aged under 18 at the end of the financial year in which you made the contribution, you can only claim a deduction if you also earned income as an employee or a business operator during the year.)
    • If you are 67 to 74, you must pass the work test (be ‘gainfully employed’ for at least 40 hours in 30 consecutive days during the same financial year) or be eligible for the work test exemption.
    • If you are 75 and over, you are generally not permitted to contribute and claim a tax deduction. You can only claim a deduction for contributions you make before the 28th day of the month following the month in which you turned 75, plus you must still satisfy the work test.
  • Notification: To claim a tax deduction for a personal super contribution, you must have given your super fund a Notice of intent to claim or vary a deduction for personal contributions form and have received a formal acknowledgement. You must also still be a member of your fund and it must still hold your contribution. In addition, your super fund must not have started paying a super income stream using the contribution and you must not have applied to split the contribution, or have given notice under the First Home Super Saver Scheme (FHSSS). 
  • Time of lodgment: When you lodge your Notice of intent to claim or vary a deduction for personal contributions form, it must be before you lodge your tax return for the year in which you made the contribution, or before the end of the income year following the one in which you made the contributions. To claim your deduction, when you complete your tax return you can attach your notice of intent to claim form or provide a copy of the form to your tax agent.
  • Contribution type: You cannot claim a tax deduction for personal contributions into your super account such as a rolled-over super benefit, employer contributions (such as SG and salary sacrifice amounts), an FHSSS amount recontributed to your super account or a downsizer contribution. Contributions made into a Commonwealth public sector defined benefit fund (such as the DSS or PSS) or an untaxed or constitutionally protected fund are also ineligible for a tax deduction.
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Learn more about making super contributions in the following SuperGuide articles:

Your simple guide to Superannuation Guarantee (SG) contributions

September 1, 2020

How to make super contributions after you’ve retired

July 8, 2020

Contributing to your super in your late 60s: What are the rules?

July 3, 2020

Work test: Making super contributions over 67

July 1, 2020

Non-concessional super contributions guide (2020/21)

June 26, 2020

How do tax-deductible superannuation contributions work?

February 1, 2020

Beginner’s guide to making super contributions

January 1, 2020

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IMPORTANT: All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs. You should consider whether any information on SuperGuide is appropriate to you before acting on it. If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions. Comments provided by readers that may include information relating to tax, superannuation or other rules cannot be relied upon as advice. SuperGuide does not verify the information provided within comments from readers. Learn more

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