Chapter 1: Contributions 

Hi, I'm Jeff Wallens, Senior Education Specialist at CBUS. 

I've spent over 25 years in super, helping people make sense of what they've got and what they can do with it. This is 'Straight Talk'. 

We break down the parts of super that matter in plain language so you know what to do next. 

Super isn't something a lot of us think about every day, but over time the choices you make help shape what comes later. 

It provides a tax-smart way to build your best retirement. 

This video shows you a few common ways you can boost your super and potentially save on tax. 

A key part of this is how tax is applied both to your own contributions and your partner's. 

We'll cover before and after-tax contributions, including salary sacrifice, spouse contributions, and downsizer contributions. 

We'll explain how each one works and help you understand whether any of these options could be useful for you. 

Chapter 2: Super and tax: Why it matters 

One of the key benefits of investing in super are the tax concessions, otherwise known as tax breaks or benefits. 

Lower tax can apply not just when you make before tax contributions, but also to the investment returns you might earn on your super. 

Any investment returns on your super are taxed at a maximum of 15%. 

Outside of super, investment returns are taxed at your marginal tax rate, which depending on what you earn could be as high as 45% plus the Medicare levy. 

Over time through the lower tax rate of 15%, super could help you grow your wealth more tax effectively than investing outside of super, helping you build your best retirement more quickly. 

Chapter 3: Concessional contributions and salary sacrifice 

Salary sacrifice is one way to add to your super from your before-tax income. 

It means putting a bit less in your pocket today from each pay packet while boosting your super and reducing your taxable income at the same time. 

The earlier before retirement you do this, the more time your money has to compound. That's when your investment returns start earning returns. 

Over time you can make a real difference to what you have when you've clocked off for good. These pre-tax super contributions are taxed at 15% when they go into super. 

For most of us, that's lower than our marginal tax rate based on how much we earn, which can be as high as 45% plus the Medicare levy. 

When your income and super contributions go over $250,000, those contributions are taxed at a higher rate of 30%. 

Chapter 4: Before-tax contributions 

The government sets a yearly limit on how much you can add to your super through what's called concessional or before-tax contributions. 

They're called concessional because they're not taxed at your marginal tax rate, but the lower tax rate of 15%. 

A little like a concession card that gives you a discount. This is the current concessional contributions cap. 

This cap includes your employer's super guarantee contributions, minimum 12%, any salary sacrifice contributions you make, and any after-tax contributions you later claim as a tax deduction. 

If your total super balance was under $500,000 at the end of the last financial year, there's some extra flexibility. 

This is called the carry-forward arrangement. 

For example, if you didn't use all your concessional caps in previous years, you may be able to use those unused cap amounts now. 

This can let you add more than the usual annual limit by using caps from up to the past five years. 

If you can do it, it can be a great way to boost your super and pay less income tax at the same time. 

Chapter 5: After-tax contributions 

Any money you add to super from your bank account is known as a non-concessional or after-tax contribution. This means you've already paid tax on it. 

That money can come from a range of sources such as savings, an inheritance, a redundancy, selling shares, or supporting your partner's super. 

There's a yearly cap on how much you can add through non-concessional contributions. This cap is set at four times the concessional contributions cap. 

Based on the current concessional cap of $30,000, that means the non-concessional cap is $120,000 per year. 

If you're eligible, you may be able to contribute more using what's known as the bring-forward arrangement. This lets you use up to three years' worth of the cap at once. 

Using today's cap, that could allow significantly more contributions in a single year. 

One important thing to know is that the bring-forward arrangement can't be used after you turn 75. 

Chapter 6: Claiming a deduction on after-tax contributions 

If you're self-employed or a sole trader and don't have an employer making contributions for you, there are still ways to access tax benefits. 

Similarly, if you haven't been salary sacrificing throughout the financial year, there may still be an opportunity for you. 

You can contribute your own after-tax money to super, then claim the tax deduction. In fact, anyone can do this. 

It's another great way to boost your super and reduce tax, which is what I'd call a win-win. 

These contributions count towards your concessional cap, so it's worth keeping a close eye on where you sit with the cap. 

You can check how much you've contributed this financial year through the CBUS app, the CBUS member portal, or your myGov account. 

Chapter 7: Contributing to your spouse's super 

There's a couple of ways you can help boost your spouse's super. 

One option is to transfer some of the before-tax contributions you made last year into your spouse's super account this year. 

This can be a handy way to lower your super balance, which may matter if you're close to the $500,000 limit for the carry-forward contributions. 

The second option is adding money directly to their super from your bank account. This is treated as a non-concessional contribution and the usual caps apply. 

Both options can be useful depending on where you're at and what you're trying to achieve. 

Chapter 8: Downsizer contributions 

Selling your primary residence at age 55 or over can give you the option to make a downsizer contribution to super. 

This is when you sell your home and move some of the sale proceeds into super. 

You can contribute up to $300,000 per person as long as it's done within 90 days of selling your house. 

For couples, that can mean up to $600,000 being added to super. Downsizer contributions sit outside the usual contribution caps. 

They don't count towards either concessional or non-concessional limits, which means they can be added on top of other contributions you may already be making. 

Chapter 9: What's next? 

If you want to see how any of these options might fit your situation, there's a few ways to take the next step. 

You can learn more about all of these contributions on the CBUS website, which has more explanations and resources on how these work and how you can start to contribute more. 

Or if you'd rather talk it through, the CBUS Advice team can help you make sense of your options with different levels of guidance depending on what you need. 

There are also seminars, webinars where our Education team breaks it down in plain language and runs through practical examples. 

These sessions are included as part of your membership. 

Also, the CBUS Super Shift podcast is another great resource to hear how super can work for you. 

And if you want to explore the numbers, CBUS also provides a contributions calculator to see the possible benefits of salary sacrifice and how it can impact your take-home pay and super over time. 

These are also known as concessional contributions. These are contributions you make from your salary before tax is applied. 

These are also known as non‑concessional contributions. These contributions are made from money you’ve already paid tax on, like your take-home pay.

You may choose to claim a tax deduction on your after‑tax contributions. This counts towards your concessional contribution cap. Learn more with the How to claim a tax deduction on personal super contributions factsheet (PDF). 

If your total before-tax contributions (including employer contributions) are below the annual cap in a year, the unused amount may be carried forward for up to five years.

The concessional cap has been:

• $25,000 between 1 July 2020 and 30 June 2021
• $27,500 between 1 July 2021 and 30 June 2024
• $30,000 from 1 July 2024 to 30 June 2025

To use carried forward amounts:

• Unused caps expire after five years
• Your total super balance must be less than $500,000 at the previous 30 June

How to check your available amount

• Log in to your ATO account
• Select Super
• Choose Information
• Click Carry forward concessional contributions
• View Unused concessional contributions available to carry forward

If you contribute more than $120,000 in a financial year, you may be able to access future year caps. This is called a bring forward arrangement.

If you’re under 75, you may be able to contribute up to three times the annual cap in one year. How much you can bring forward depends on your total super balance.

Example:

• Mei has a super balance of $400,000 and receives a $250,000 inheritance
• Using the bring forward arrangement, she could contribute the full $250,000 to super in one go
• To avoid extra tax, she needs to make sure her total non concessional contributions don’t exceed $360,000 over three financial years.^*

^* Example is for illustrative purposes only.