Yes. You can contribute make before- or after-tax contributions as long as you’re under 75. If you’re between 65 and 75, you’ll need to meet the ‘work test’. Before making extra contributions you’ll need to consider the contribution caps.
Before-tax contributions are contributions you make to your super from your before-tax salary. Under tax law, they’re treated as concessional contributions. These contributions may reduce the income tax you pay, while giving your super savings a boost. This is known as ‘salary sacrificing’ and is organised through your employer’s payroll department.
The government, however, imposes limits, known as ‘contributions caps’, on the total contributions you can make each financial year to your super. If you exceed these limits, you’ll need to pay a higher rate of tax.
If you’re aged below 49 on 30 June 2016, you can contribute up to $30,000 of concessional contributions in the 2016-17 financial year and incur the 15% contributions tax, provided we have your TFN and the very high income earners tax does not apply to you (see How super is taxed) for details. If you’re aged 49 years or over on 30 June 2016, your before-tax contributions cap is $35,000. Any concessional contributions exceeding this limit will be added to your assessable income and taxed at your marginal rate.
If you’re DBD member, your concessional contributions are calculated based on your ‘notional taxed contributions’ rather than the total amount of before-tax contributions you make. For more information, read:
You can also make after-tax contributions to your super if you’re under 75. If you’re between 65 and 75, you need to meet the ‘work test’.
After-tax contributions are voluntary contributions you can make from your salary after income tax has been deducted. Your after-tax contributions are treated as ‘non-concessional’ contributions in applying the contributions cap.
The non-concessional contributions cap for 2016-17 is $180,000. If you exceed this limit, your excess contributions will be taxed at 49%. If you’re under 65, however, you may be able to average your contributions over a period of three years by bringing forward the next two years of contributions. Certain conditions apply so you’ll need to check you’re able to apply this strategy.
For more information about before-tax and after-tax contributions and contributions caps, read Your guide to a better retirement.
If you need help with your contributions strategy, we recommend you speak to a qualified financial adviser.