Superannuation is one of the most powerful wealth-building tools available to Australians, yet it is also one of the most misunderstood. For many people, super is something that sits quietly in the background, growing over time with little attention. However, understanding how contributions work, and how to use them strategically, can make a significant difference to your long-term financial outcomes.
At EPG Wealth, we regularly see how small, well-planned decisions around superannuation contributions can lead to substantial improvements in retirement readiness, tax efficiency, and overall financial confidence. This article provides a clear, practical overview of super contributions and how they can be used as part of a broader financial strategy.
What are superannuation contributions?
Superannuation contributions are payments made into your super fund. These contributions are invested on your behalf and grow over time through investment returns. There are two main categories of contributions: concessional and non‑concessional.
Each type has its own tax treatment, limits, and strategic uses. Understanding the difference between them is essential for making informed decisions.
Concessional contributions
Concessional contributions are contributions made from pre‑tax income. They include employer Super Guarantee contributions, salary sacrifice contributions, and personal contributions for which you claim a tax deduction.
These contributions are generally taxed at 15% when they enter your super fund, which is often lower than most people’s personal income tax rates. This makes concessional contributions a highly effective way to reduce tax while building retirement savings.
For the 2025–26 financial year, the concessional contributions cap is $30,000 per person. This includes all employer and personal deductible contributions combined.
Non‑concessional contributions
Non‑concessional contributions are made from after‑tax income. No tax is paid when these contributions enter your super fund because the money has already been taxed at your personal income tax rate.
The non‑concessional contributions cap is $120,000 per year. In some cases, individuals under age 75 can use the bring‑forward rule, allowing them to contribute up to $360,000 over a three‑year period.
These contributions are particularly useful for investing surplus savings, boosting super balances before retirement, and managing tax‑free components for estate planning.
Downsizer contributions: using property to boost your super
Downsizer contributions provide a powerful opportunity for Australians aged 55 and over to boost their superannuation using the proceeds from selling their home.
Unlike most other contribution types, downsizer contributions:
– Do not count toward concessional or non‑concessional contribution caps
– Do not require you to meet a work test
– Are not restricted by total super balance limits
Eligible individuals can contribute up to $300,000 each, or $600,000 per couple, into super from the sale of an eligible main residence.
To qualify:
– You must be aged 55 or older at the time of contribution
– The home must have been owned for at least 10 years
– The property must qualify for the main residence CGT exemption
– The contribution must be made within 90 days of settlement
– The official downsizer contribution form must be lodged
Downsizer contributions are especially valuable for boosting retirement capital, converting property wealth into a tax‑advantaged environment, and improving estate planning efficiency.
Carry‑forward concessional contributions
If your total super balance is under $500,000, you may use unused concessional cap amounts from the previous five financial years. This allows larger deductible contributions in high‑income years or when receiving a financial windfall.
Contribution strategies and tax efficiency
Super contributions are about structuring wealth in the most tax‑effective way possible. Salary sacrifice can reduce taxable income and potentially lower marginal tax rates, Medicare levy impacts, and HELP repayments.
Even modest contributions can compound into significant long‑term outcomes.
Final thoughts
Superannuation contributions are one of the most powerful tools available for building long‑term wealth in Australia. With careful planning, they can significantly improve retirement outcomes while delivering immediate tax benefits.
If you would like to improve your current investment strategies or are looking to start your investment journey, click here to organise a complimentary 20-minute phone call with an EPG Wealth adviser.