Many Australians in their 30s, 40s and 50s have mastered the basics of personal finance – you pay your mortgage, build some investments, and even throw some money into super when you can. But with rising tax pressure and the cost of living squeezing every dollar, it’s easy to put superannuation in the “set and forget” bucket. That could be a costly mistake.
Smart use of super concessional contributions – especially the often-overlooked carried forward cap – can offer substantial tax benefits, significantly boost your retirement savings, and even help with one-off windfalls like a bonus or sale of an investment.
And if you’re on a decent income, the upside may be much bigger than you think.
What are concessional contributions?
Concessional contributions are super contributions made from pre-tax income. This includes:
- Employer contributions (including SG)
- Salary sacrifice contributions
- Personal contributions you claim as a tax deduction
These contributions are taxed at just 15% inside super, or 30% if your income exceeds $250,000. That’s often much lower than your marginal tax rate, which can be as high as 47%.
Let’s say you’re on a $160,000 income and decide to contribute $10,000 into super. Instead of being taxed at 39% ($3,900), your contribution is taxed at 15% ($1,500), saving you $2,400 in tax while adding to your retirement nest egg.
Watch out for annual contribution caps
The annual limit for concessional contributions is now $30,000 for the 2024–25 financial year. Going above this cap can trigger additional tax and penalties, so it pays to be strategic.
But if you haven’t maxed out your concessional contributions in previous years, you may have more room than you realise. Thanks to carried forward concessional contributions, you can tap into unused cap amounts from up to five years ago – a valuable opportunity for professionals in their peak earning years to pay less tax and boost their super.
The power of carried forward (or “catch up”) contributions
Since 2019, Australians have been able to carry forward any unused portion of their concessional cap for up to five years. You just need to have a total super balance of under $500,000 as at the previous 30 June.
Let’s look at an example. Amir, a 45-year-old architect, has mostly relied on employer super and hasn’t made extra contributions. Over the past few years, he hasn’t reached the $30,000 cap – often contributing only around $15,000 annually. Now, with a $30,000 bonus and a growing tax bill, he consults his financial adviser. They discover he has $50,000 in unused concessional cap carried forward.
By contributing that amount this year, Amir:
- Saves over $15,000 in tax
- Builds his super faster
- Makes the most of a one-off windfall without breaching any limits
How to check your unused concessional cap
You can easily check your unused concessional cap yourself using the ATO portal via your MyGov account.
What you’ll need
- A MyGov account linked to the ATO
- Your login details
Step-by-step guide
Step 1: Log in to MyGov
Visit my.gov.au and sign in.
If you don’t have an account yet, create one and follow the prompts to link the ATO as a service.
Step 2: Open the ATO section
Once you’re logged in, click on the Australian Taxation Office (ATO) tile from your MyGov homepage.
Step 3: Go to the Super tab
In the ATO online portal, look for the top menu and click on ‘Super’.
Step 4: Choose ‘Carry forward concessional contributions’
Click ‘Information’, then select ‘Carry forward concessional contributions’ from the dropdown options.
Step 5: Check your details
You’ll now see your:
- Total Super Balance as at 30 June last year
- Whether you’re eligible to make catch-up contributions (balance must be under $500,000)
- How much unused concessional cap you have available
- A year-by-year breakdown of your past contributions and any unused cap amounts
- Click ‘Show details’ to expand and see how each year’s unused amounts were calculated
Important tips
- The data reflects what your super fund has reported to the ATO. If there’s a delay in your super fund reporting, the figures may be outdated. We always recommend you cross check these figures with your super fund.
- Keep your own contribution records, especially if you have changed funds or made personal deductible contributions.
- If your super balance was over $500,000 at the previous 30 June, you won’t be eligible to use carried forward contributions, even if you have unused amounts.
- Before a financial planning meeting, download or screenshot your carry forward cap details to share with your adviser. It makes the conversation much more efficient and accurate.
Strategies to boost your super benefits
Here are a few lesser-known ways to get more from your super concessional contributions strategy.
Pair with investment income
If you’re selling shares or property and facing a large capital gains tax bill, a well-timed super contribution can help reduce your taxable income.
Avoid breaching the cap
Many professionals unintentionally go over the limit due to generous employer contributions and existing salary sacrifice arrangements. Reviewing your total contributions can prevent costly mistakes.
Super splitting
If your partner earns less, splitting contributions can help manage balances across the household and maximise tax opportunities in future.
Layer contributions
With careful planning, you can stagger contributions across multiple financial years to avoid losing carried forward entitlements.
Don’t wait – unused concessional contribution caps expire
Unused concessional caps only last for five years. If you don’t use them, you lose them.
That means now is the time to take action, especially if you’re in a high-income year or preparing for a big change – like parental leave, a sabbatical, or the sale of an asset.
Be smart with your super
Contributing to super might not feel urgent, but done right, it’s one of the most powerful ways to reduce tax and build long-term wealth. And if you’re carrying unused concessional cap space, the opportunity may be even greater than you think.