2 Main Types of Superannuation Contributions

Confused by various terms such as non-concessional superannuation contributions and concessional superannuation contributions?

Here’s what it means in a nutshell.

Non-Concessional Superannuation Contributions

Non-concessional superannuation contributions is a special term associated with after-tax super contributions, ie. contributions for which an individual or employer hasn’t claimed a tax deduction.

Examples include after-tax spouse contributions and contributions made under the Super Co-contribution Scheme.

Concessional Superannuation Contributions

Concessional superannuation contributions are contributions made into your super fund before tax, which are then taxed at 15% within the superannuation fund.

These include employer contributions (both super guarantee contributions and employee salary sacrifice contributions) and personal contributions claimed as a tax deduction by the taxpayer.

From 1st July 2017, the concessional superannuation cap has been $25,000 per financial year. It is not tax effective to make contributions in excess of the contribution cap as the excess contributions will be taxed at the taxpayer’s marginal tax rates.

Tax Tip:

Making $25,000 concessional superannuation contributions annually is very tax effective as the super fund is only taxed at 15%, whereas the employer or taxpayer will be in a higher tax bracket (up to 47%), so there can be up to a 32% tax saving on the contributions made.

Where the taxpayer’s taxable income is greater than $250,000 the tax payable on the super contributions increases from 15% to 30%, so the maximum tax savings on the contributions is reduced to 17%.

In addition, from 1st July 2018 catch-up concessional superannuation contributions are allowed for those with account balances of $500,000 or less. This allows unused concessional contribution caps to be carried forward on a rolling basis for up to five years. So, up to $125,000 concessional contributions could be made in one year.


Fortiz Accountants is one of the few accounting firms which is licensed to provide advice on superannuation and SMSF (AFSL No. 483940). Contact us today for assistance with your SMSF tax returns and tax advice!