How do tax-deductible superannuation contributions work?

In this guide

So what are tax-deductible super contributions?
Who can make tax-deductible contributions?
How do I claim a tax deduction for a personal contribution?
The bottom line
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Key points about claiming a tax deduction for personal contributions:

Current annual cap: Personal contributions you claim as a deduction are concessional contributions, counted towards the annual concessional cap ($32,500 in 2026–27).
Tax treatment: Most concessional contributions are taxed at 15%. Higher-income earners may also pay Division 293 tax.
Eligibility: Aged below 67 years old, or aged 67 to 74 and meeting the work test. Under 18s at the end of the financial year must have income from employment or running a business.
Contributing more: Eligible people can carry forward any unused concessional contributions cap amounts from the previous five financial years.
How it works: Make a contribution to super from your own money, then claim a tax deduction for it.
Important deadlines: Contributions must be made before your 75th birthday or within 28 days after the end of the month you turn 75. The notice of intent must be lodged before you complete your tax return, or by the following 30 June, whichever comes first.

If you’ve got cash to spare and would like to boost your retirement savings, then making a tax-deductible super contribution is a great way to get the maximum bang for your buck.

Yes, that’s right. You can boost your super and get a tax deduction to sweeten the deal. But as with everything to do with super, there are rules and limits to the government’s generosity.

For starters, you can’t claim a tax deduction for super contributions your employer makes on your behalf. This includes your employer’s compulsory Super Guarantee and any reportable contributions above this amount, including any salary-sacrifice arrangements you may have.

You also can’t claim deductions for rollover payments from another fund, including foreign funds.

So what are tax-deductible super contributions?

Tax-deductible super contributions are contributions you make from your after-tax income for which you claim a tax deduction. This income may be from a variety of sources such as your take-home pay, savings, an inheritance or from the sale of assets.

Making a personal tax-deductible contribution can be a great way to offset capital gains you make on assets held outside super.

Whatever the source, you can make a payment to your super fund from your bank account either as a one-off payment or a periodic direct debit.

Personal contributions you claim as a tax deduction count towards your concessional contributions cap. You may be able to contribute even more if you have unused caps from previous financial years using the carry-forward rule.

Definition

Concessional contributions are taxed at the ‘concessional’ super rate of 15% for people whose income plus concessional super contributions is below $250,000. For most people, 15% is lower than the marginal tax rate you pay on income. For those earning more than $250,000 when concessional super contributions are included, an additional 15% tax is payable on some or all your concessional contributions.

Example

Mary is a graphic designer earning $80,000 a year. Mary decides she can afford to make a $10,000 personal deductible contribution to her super fund.

After $1,500 (15%) of contributions tax is deducted, Mary is left with a net contribution to her super of $8,500.

Mary then claims a tax deduction of $10,000 in her tax return, reducing her taxable income to $70,000 for the year (ignoring any other income and deductions). As her marginal tax rate is 32% (including Medicare levy), she pays $3,200 less in tax. Keeping in mind the $1,500 she paid in contributions tax her net tax saving is $1,700.

A word of warning though. If you exceed your concessional contributions cap, the excess contribution won’t generate any tax savings. These excess contributions will also count towards your non-concessional contributions cap, unless you choose to withdraw the excess from super.

Who can make tax-deductible contributions?

Most Australians are able to make voluntary tax-deductible super contributions if they have any assessable income to declare.

Good to know

If your employer doesn’t allow salary sacrifice, or if you have built up savings outside super you would like to contribute, then you can make a personal tax-deductible contribution instead. For employees, salary-sacrifice and personal tax-deductible contributions give the same result.

Before you get too excited, there’s a catch. To be eligible to claim a tax deduction for your voluntary super contributions you must also:

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Add the contribution to super either before your 75th birthday or within 28 days after the end of the month you turned 75
Meet the work test if you’re aged 67 or more on the day you make the contribution
Not make the contribution to an untaxed super fund or a Commonwealth defined benefit fund
Have earned income as an employee or business operator during the financial year if you’re under 18 at the end of the income year that you made the contribution

If you do claim a tax deduction for your personal super contribution, it will not attract the government super co-contribution. You may however make an additional after-tax personal contribution to qualify for the scheme.

Note

Lower income earners may need to weigh up which of these two contributions strategies gives them the best result. If you’re on low marginal rate, there may be no advantage in making a tax-deductible super contribution but the government co-contribution could provide a welcome super boost.

How do I claim a tax deduction for a personal contribution?

Before you can claim a tax deduction for your personal super contributions, you must provide your fund with a ‘Notice of intent to claim or vary a deduction for personal super contributions’ form (NAT 71121). You can download this form from the Australian Taxation Office (ATO) website, or get it from your super fund. Some funds also offer the option to claim a deduction online.

When you complete the form, you must:

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Provide it to your fund by the end of the financial year following the one in which you made the tax-deductible super contribution, or by the day you lodge your tax return for the financial year in which you made the contribution, whichever comes first.
Receive written acknowledgement from your super fund before you claim the tax deduction on your tax return. This acknowledgement will confirm the amount you are eligible to claim as a tax deduction.

Need to know: Timing matters for your notice

If you’re planning to split all or part of your contributions with your spouse but you also want to claim a tax deduction for them, you must give the notice of intent to claim a deduction first. You can then lodge a superannuation contributions splitting application (NAT 15237).

You can’t lodge the forms the other way around because until your request to claim a deduction is processed your contribution is recorded as a non-concessional amount. Non-concessional contributions are not splittable.

The bottom line

If you’re eligible to make tax-deductible super contributions, it’s a strategy well worth considering. Not only will you boost your retirement savings, but you’ll be doing it in the most tax-effective way.

Whether it’s appropriate for you depends on your individual financial circumstances. Your super fund may be able to give you more information and it may also be worthwhile seeking independent financial advice

The information contained in this article is general in nature.

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