Personal concessional contributions and how they could benefit you?

Every financial year there are limits on the amount of concessional contributions (before tax contributions) that can be made into a super fund. For the financial year ended 30 June 2022 the limit is $27,500 per year, per person, if you do not have more than $500,000 in superannuation as of the 30th of June. Superannuation guarantee contributions and salary sacrificed contributions are classified as concessional contributions and are included in this limit.​

If your Superannuation guarantee contributions and salary sacrificed contributions total less than this limit it might be tax advantageous for you to contribute extra super payments to max out the limit. The reason you might consider doing this is because for every dollar that is paid into super, up to the limit, you can claim a tax deduction.​

The tax benefit of topping up your concessional contributions could potentially result in a tax saving of up to 32% and enable you to increase your super balance at the same time. This is because your marginal tax rate could be up to 47% but the concessional contribution will only be taxed by your super fund at 15%.​

To be eligible to top up your concessional contributions you will have to fill out a Notice of Intent form and send it to your super fund. You must receive an acknowledgement from your super fund before you can claim a tax deduction.​

Please note that this is not something everyone should consider and may not be the best decision for your own circumstances so please make sure you reach out to your accountant before deciding to top up your concessional contributions.​