6 ways to pimp your superannuation before the end of the financial year

If you’re not yet retired, you could get a head start on your superannuation admin now to boost your retirement income later on (and save you from last-minute stress). Here’s how to maximise your super benefits before you do your tax return.

By Alex Brooks

We all know that superannuation can be as interesting as watching paint dry. 

But what if I told you that your super is a tax haven where your money is taxed at just 15% and there’s no Medicare levy? 

Once super turns into retirement income, there’s usually no tax at all! (It’s almost as good as an offshore tax haven.)

So get yours in shape before the end of the financial year with these tips.

PS: don’t forget to read our Calculating Super guide and 11 ways to make retirement income last as long as you do.

PPS: don’t forget to do these 6 checks on your next super statement.

1. Check your contribution caps

The very phrase ‘contribution caps’ makes superannuation sound scary and financey.

But a superannuation concessional cap is a limit set on the amount of money you can put into your superannuation fund at a lower tax rate each year - it’s an extra special gift from the government to avoid the tax man and boost your retirement income later on.

It’s crucial to monitor how much you’re contributing to your super, both concessional (before-tax) and non-concessional (after-tax), especially if you’re thinking about making additional contributions before 30 June. 

The caps for 2023–24 are $27,500 for concessional and $110,000 for non-concessional contributions. From July 1, 2024 the annual concessional cap goes to $30,000 and the non-concessional contributions cap goes up to $120,000. Members under 75 years of age may be able to make non-concessional contributions of up to 3 times the annual non-concessional contributions cap in a single year - read more on the Australian Tax Office website.

From July 1, the super guarantee rate that employers must pay into super goes up to 11.5%, too.

2. Make sure extra contributions hit your super account before 30 June

 If you want your super contribution to count for the current financial year, make sure your super fund receives it by 30 June. 

(Sometimes your employer will pay the quarterly super payment AFTER June 30 - so check in with them if it's important to your plans).

3. Maybe a tax-deductible super contribution is on your radar?

If you’ve got room under your concessional contributions cap, think about making a personal tax-deductible contribution to your super. 

This could be a smart way to save on tax, as you may be taxed at a lower rate on these contributions compared to your marginal tax rate.

Your super fund will likely require a 'notice of intent' if you wish to do this. Then your fund must send you a written acknowledgment, telling you they have received a valid notice from you. You must receive the acknowledgment from your fund before you claim the deduction on your tax return.

This is important if you’re planning to claim a tax deduction for your contributions or if you're making a non-concessional contribution to qualify for a government co-contribution.

If you’ve maxed out your concessional contributions or simply have some extra cash, non-concessional contributions are another way to boost your super since these aren’t taxed upon entry to your super fund. Plus, if you’re on a lower income, you might also get a co-contribution from the government

4. Boost your partner’s super balance

If there’s a significant difference in super balances between you and your spouse, or if one earns significantly more, consider using contribution splitting to balance your super accounts more evenly.

You can split your employer super contributions with your spouse. Contact your super fund or see contributions splitting on the Australian Tax Office website for more information.

5. Check if a tax offset on your super is right for you

There are a few tax offsets designed to encourage super contributions and support low income earners and veterans in pre-retirement.

If your partner earns a low or no income, you may be able to claim a tax offset if you contribute to their super fund.

If your income is $37,000 or less, you might receive a low income super tax offset directly into your super fund, worth up to $500. This offset is calculated and paid by the Australian Taxation Office so you don't need to claim it separately.

If you’re a veteran receiving an invalidity pension, you might be able to get the Veterans' Super (Invalidity Pension) Tax Offset: a non-refundable tax offset for veterans so they don't pay extra tax due to specific legal decisions.  

Read more on the Australian Tax Office website or speak to your accountant or financial advisor.

6. Think about how to maximise your super in the next financial year

Now's the time to ponder whether it’s worth setting up a salary sacrifice in the next financial year. 

This allows you to contribute part of your pre-tax salary to super, which can be a tax-effective way to increase your retirement savings. 

You can ask your employer to pay some of your salary into your super on top of the superannuation guarantee minimum percentage payments that your employer is obliged by law to contribute. 

These payments taken from pre-tax income are called concessional contributions (see point 1).

^{Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.}