Financial Planning, Superannuation

Should you Make Voluntary Super Contributions?

3 June 2021

How Personal Superannuation Contributions Could Help you Secure a Stress-free Retirement.

If you are hoping to retire comfortably and with peace of mind, making personal super contributions could be the direction to take.

What’s more, the sooner you start contributing, the more opportunities your super has to grow.

Superannuation is the wealth accumulation vehicle that most Australians rely on to fund their retirement. Plus, it will be one of your largest, reliable assets in retirement.

Your super is such a critical resource for your retirement. The better care you take of your super now, the more options you will have in your golden years.

Most Australians receive regular superannuation contributions from their employer – known as the Superannuation Guarantee – to help boost their retirement savings.

Your employer super contributions are determined based on a percentage of your pay. The minimum percentage that you will receive as your Superannuation Guarantee will continue to change in the future.

The rates below, from Canstar, outlines the current Super Guarantee rate and the changes we expect to see in the future:

  • 1 July 2014 – 30 June 2021: 9.5%
  • 1 July 2021 – 30 June 2022: 10%
  • 1 July 2022 – 30 June 2023: 10.5%
  • 1 July 2023 – 30 June 2024: 11%
  • 1 July 2024 – 30 June 2025: 11.5%
  • 1 July 2025 – 30 June 2026 and onwards: 12%

However, if you are self-employed or are not eligible for the Superannuation Guarantee, your super balance may need an extra boost. Personal super contributions may become vital for a comfortable retirement.

What are Personal Super Contributions?

According to the ATO1:

“Personal super contributions are the amounts you contribute to your super fund from your after-tax income (that is, from your take-home pay).”


These contributions:

  • are in addition to any compulsory super contributions your employer makes on your behalf
  • do not include super contributions made through a salary sacrifice arrangement.

These extra contributions can be ongoing or as a one-off payment.


What Super Contributions can I Make?

1. Pre-tax Super Contributions

This contribution is where you select to pay part of your pre-tax pay into your super account instead.

This is also known as salary sacrificing, salary packaging, or concessional contributions.

These payments are taxed at a rate of 15% which for most people, will be lower than the tax they would have to pay if they elected to take home their full pay.

For this reason, making pre-tax super contributions is a tax-effective strategy for most people. It also helps to boost your retirement savings.

There is a limit on how much you can contribute as a pre-tax contribution.


“The combined total of your employer and salary sacrificed contributions must not be more than $25,000 per financial year”.


However, from 1 July 2021, the contribution cap will increase to $27,500.

If you are self-employed, you can claim a tax deduction on pre-tax super contributions.

To make these extra contributions as an employee, you can enter an arrangement with your employer. You should seek financial advice before entering into a salary sacrifice arrangement.

Cambio Group’s financial planners can help you determine how voluntary super contributions could benefit your financial situation and help you be retirement-ready.

Another super contribution you can make is an after-tax super contribution…


 2. After-tax Super Contributions

These are voluntary payments into your super fund from your after-tax income.

These are sometimes referred to as non-concessional contributions.

As you have already paid tax on the money, you don’t have to pay extra tax if you decide to contribute some money to your super fund.

You can currently make up to $100,000 in after-tax super contributions per year. From 1 July 2021, the non-concessional contributions cap is being increased to $110,000.


Ready to start making extra super contributions?

At Cambio Group, we specialise in developing tailored financial plans that will secure financial freedom for you.

Our experienced, knowledgeable financial advisers can help you determine whether voluntary superannuation contributions will benefit your financial situation.

We can help you consider all potential super strategies to ensure you are making the most of your super fund.

With our technical skills and expertise, you can be sure that a Cambio Group financial adviser will help you secure your financial future and bring you peace of mind now and in your retirement.

To discuss your superannuation strategy and financial plan, call Cambio Group today on 5504 0500 or fill in our contact form below to book an appointment with our financial advice team.


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Disclaimer: The information (including taxation) in this website does not consider your personal circumstances and is of a general nature only – unless otherwise stated. You should not act on the information provided without first obtaining professional advice specific to your circumstances.

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