Understanding superannuation contributions and taxes

By adding a little bit extra to your super, you could enjoy more retirement savings and several tax benefits.

Making additional contributions to your super is one of several strategies you can use to help ensure your retirement years are comfortable.

There may also be tax incentives to adding a little extra into your super, so it’s important you understand how the tax rules work.

Understanding pre and post-tax contributions

There’s a few different types of additional contributions you can make to your super. Most of these contributions will be classed as either ‘pre-tax’ or ‘post-tax’.


There are limits to how much you can add to your super without tax implications - these are known as 'contribution caps'. Learn more on our contribution caps webpage.

Pre-tax contributions

Also known as concessional contributions, these are contributed prior to your income being taxed. They include Super Guarantee contributions made by your employer, and salary sacrifice contributions. These contributions are subject to a super contribution tax of 15%1 which we automatically pay to the ATO on your behalf.

The current concessional contribution cap is $30,000 per financial year. You may however be able to contribute more than this if you’re eligible to carry-forward unused contributions from previous financial years.

Post-tax contributions

Also known as non-concessional contributions, these are typically contributed with money that has already been taxed. They include personal after-tax contributions and spouse contributions. They are not subject to a contribution tax.

The current non-concessional contribution cap is $120,000 per financial year. You may however be able to contribute more than this if you’re eligible to use the ‘bring-forward rule'.

Understanding the different contribution types

Depending on your situation, there are different types of contributions you may choose to make to your super.

  • Superannuation Guarantee

    Superannuation Guarantee (SG) contributions are the mandatory contributions made to your super account by your employer. Typically, all employers are required to contribute 11.5% (this will increase up to 12% by 1 July 2025) of your gross income to your super account. These contributions, along with any other contributions you make, will be invested throughout your working life, largely forming the foundation of your retirement savings.

    For further information on SG contributions, please see our dedicated SG page.

    Are you self-employed, a contractor or a sole-trader?

    If you’re self employed, a contractor or a sole-trader, it’s generally not compulsory to contribute to your super. However, it's important to recognise that your super will likely play a pivotal role in determining how comfortably you can enjoy your retirement. While the decision to contribute is entirely voluntary, it's an investment in your future well-being that shouldn't be overlooked.

    The easiest way to contribute to your super if you're self-employed, a contractor or a sole-trader is to make an after-tax personal contribution. Depending on your circumstances you may also be eligible to claim some or all of those contributions as a tax deduction.

    For further information, on personal contributions, as well as claiming them as a tax deduction, see the ‘Personal contributions’ sections below.

  • Salary sacrifice

    Salary sacrificing is a type of concessional contribution you can make to your super, by asking your employer to add some of your wages directly into your super. The amount you choose to be added to your super comes out of your salary before you’re paid, reducing your taxable income and providing an immediate tax benefit.

    Any salary sacrificing contributions your employer makes on your behalf will be on top of their compulsory super contribution.

    If you’d like to set up a salary sacrifice arrangement, please speak with your employer directly.

    For further information on salary sacrifice, please see our salary sacrifice page.

  • Personal contributions (after-tax)

    Personal contributions are typically made with your after-tax money, such as funds in your savings account. 

    These contributions aren’t subject to the 15% super contribution tax, unless you claim them as a tax deduction.

    You can make an after-tax contribution to your super via BPAY® or cheque. 

    You can find your BPAY® details on the ‘Personal Details’ page of your online account, under BPAY: Telephone and internet banking.  BPAY® details were also included in your Welcome Letter. 

    If you would like to make an after-tax contribution via cheque please complete and return to us a ‘Making an after-tax contribution’ form.

    For further information on personal contributions please see our personal contributions page.

  • Personal contributions (pre-tax)

    You may be eligible to claim a tax deduction on contributions made to your super with after-tax money. Any contributions you claim as a tax deduction will count towards your concessional contribution cap.

    To claim contributions as a tax deduction you will need to complete and return to us a ‘Notice of intent to claim or vary a deduction for personal super contributions’ form.

    This form will need to be returned to us no later than the day you lodge your tax return for the relevant financial year, or by 30 June of the financial year after the contribution(s) were made.

  • Spouse contributions

    To help bolster your spouse’s super balance, you may be able to contribute to their super on their behalf.  A spouse contribution is made with your already-taxed money and when contributed will count towards your spouse’s non-concessional contribution cap.

    Depending on your situation, in addition to boosting your partner’s balance, you could also be eligible for a tax offset of up to $540, which you can claim as part of your tax return.

    For further information on spouse contributions, including eligibility criteria please see our spouse contributions page.

  • Contribution splitting

    Depending on your circumstances, you might prefer to transfer some of your own super to your spouse’s account. This is known as contribution splitting.

    You may be able to split up to 85% of your concessional contributions for the previous financial year, such as super contributions from your employer or salary sacrifice payments, with an eligible partner.

    This contribution is unique as it does not count towards either of your partner’s contribution caps. However, it’s important to know this movement of funds from your account does not reduce the amount you’ve used of your concessional contribution cap.

    For further information on contribution splitting, including eligibility criteria, please see our contribution splitting page.

  • Super co-contribution

    The super co-contribution is an initiative of the Australian Government that aims to help low and middle-income earners add money to their super.

    Under the scheme, the Australian Government co-contributes to your super up to an amount of $500, if you make after-tax personal contributions. The exact amount that the Government contributes will depend on both your income and how much you contribute in personal non-concessional contributions.

    To receive this contribution, you don’t need to take any additional steps once you’ve made your after-tax contribution. The ATO will determine if you’re eligible when you complete your tax return. If we hold your TFN on file. Your super co-contribution will be automatically paid to your super account.

    This contribution will not count towards either of your contribution caps.

    For further information on the super co-contribution, including eligibility criteria please see our factsheet.

  • Downsizer contribution

    For those members 55 years of age and older, you may be eligible to contribute up to $300,000 ($600,000 for a couple) to your super account, if the funds come from the sale of your home. This contribution won’t count towards either of your contributions caps or be subject to super contributions tax.

    For further information on the eligibility criteria, as well as how to make a downsizer contribution please see the ATO’s website.

  • First Home Super Saver Scheme

    The First Home Super Saver Scheme allows you to make both concessional and non-concessional contributions to your super, and later withdraw up to $50,000 (made up of both the original contributions and their associated investment earnings) to be put towards purchasing a property to live in.

    For further information on the First Home Super Saver Scheme, including eligibility criteria, please see our First Home Super Saver Scheme webpage.


Our Retirement Income Simulator, can help you understand what your retirement income could look like, how long it might last and how adding even a little extra can have a significant impact over the long-term.

Super financial advice

As a Mercer Super member, you can access limited financial advice about your super to help you achieve your financial goals at no extra cost.

Read next:

Changing jobs and your super

If you’re changing jobs, you can take your Mercer Super account and benefits with you.

Nominating your superannuation beneficiary

By nominating a beneficiary you can let us know who you’d like your super to go if you pass away.

The ins and outs of additional personal super contributions

Your super is a long-term investment – additional contributions you make today can have a significant impact on your balance and retirement outcomes.

1 If the total of your surcharge income and concessional contributions is more than $250,000 per year, any concessional contributions over this threshold will be taxed at 30%. This extra 15% tax is often referred to as 'Division 293 Tax'. Find out more at ato.gov.au/rates/key-superannuation-rates-and-thresholds or by seeking your own tax advice.

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The material contained in this document is based on information received in good faith from sources within the market and on our understanding of legislation which we believe to be accurate. Neither Mercer nor any of its related parties accepts any responsibility for any inaccuracy.

This information is based on the interpretation of current tax laws which may change. You should obtain your own tax advice.

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IMPORTANT: Please note that any information in this material regarding legal, accounting or tax outcomes does not constitute legal advice or an accounting or tax opinion and prior to relying and acting on this information it is important that you seek independent advice from a qualified lawyer or accountant regarding this information.