Concessional contributions
Before-tax money going into your super — employer contributions and salary sacrifice — taxed at just 15% inside the fund.
Concessional contributions are amounts that enter your super before income tax has been applied. They include your employer's compulsory Super Guarantee, any salary sacrifice you arrange, and personal contributions you claim a deduction for.
They are taxed at 15% on the way into the fund, rather than at your marginal rate. For someone on a 37% marginal rate, that is a 22 percentage point saving on every dollar redirected — the core reason salary sacrificing into super is so effective.
The annual cap is $30,000 for FY2025-26. Exceed it and the excess is taxed at your marginal rate with an interest charge attached, so it pays to track employer contributions and salary sacrifice together rather than separately.
Sacrificing $10,000 on a 37% marginal rate
Taken as salary, $10,000 leaves you about $6,300 after tax. Sacrificed into super, $8,500 lands in the fund after the 15% contributions tax — $2,200 more working for your retirement.
The bit people get wrong
Your employer's Super Guarantee counts towards the same $30,000 cap as your salary sacrifice. People who set a sacrifice amount and forget about it often breach the cap after a pay rise lifts their employer contributions.
Common questions
What happens if I exceed the concessional cap?
The excess is included in your assessable income and taxed at your marginal rate, less a 15% offset for the tax already paid by the fund, plus an interest charge. You can elect to release the excess from super.
What are carry-forward contributions?
If your total super balance is under the threshold, you can use unused cap amounts from the previous five years, letting you make a larger contribution in a single year — useful in a year with a capital gain.
Can I claim a deduction for personal contributions?
Yes. Contribute from your own after-tax money and lodge a notice of intent with your fund, and you can claim a deduction. The contribution then counts as concessional and against the cap.
Run your own numbers
Related terms
Source: Australian Taxation Office