Superannuation Contribution Limits Explained: Concessional vs. Non-Concessional

Superannuation is a key pillar of your retirement plan, but there’s a catch: you can’t just pour in as much money as you like. The Australian government sets contribution limits to balance tax benefits and fairness. These caps come in two flavours—concessional and non-concessional—and understanding them can help you make the most of your super. This guide breaks it all down with the latest rules, examples, and pitfalls to watch—without tailoring it to your personal situation. For that, a financial adviser’s your best bet.

Growing your super is like nurturing a money tree—steady contributions today can bloom into a secure retirement tomorrow

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Why Contribution Limits Exist

Super offers tax perks to encourage saving, but the caps keep it in check. In the 2023-24 financial year, Aussies contributed $175 billion to super, according to the Australian Prudential Regulation Authority (APRA). Knowing the limits lets you plan smarter and avoid nasty tax surprises. Let’s dive into the two types.

Concessional Contributions: Tax-Friendly Boosts

Concessional contributions are made with “before-tax” money—like your employer’s super guarantee (SG), salary sacrifice, or personal contributions you claim a tax deduction for.

• Limit (2025-26): $30,000 per year, per the ATO’s contribution caps.

  • Note: This was $27,500 in 2024-25; it’s indexed to Average Weekly Ordinary Time Earnings (AWOTE) and typically rises every year or two—check the ATO for the latest.

• Tax Rate: 15% inside super—often lower than your income tax rate (e.g., 32.5% for incomes $45,001-$135,000 in 2025-26). High earners ($250,001+) pay an extra 15% on some contributions.

• Sources: Includes your employer’s 11.5% SG (rising to 12% by July 2025) and any voluntary extras you arrange.

• Example: Earning $80,000? Your SG is ~$9,200. Add $10,000 via salary sacrifice, and you’re at $19,200—still under the cap.

Watch Out: Exceed $30,000, and the excess gets taxed at your marginal rate (plus an interest charge), as outlined in the ATO’s excess contributions

Non-Concessional Contributions: After-Tax Power

Non-concessional contributions come from “after-tax” money—think personal savings or cash you’ve already paid tax on.

• Limit (2025-26): $120,000 per year.

  • Note: Was $110,000 in 2024-25; it’s also AWOTE-indexed—confirm with the ATO.

• Bring-Forward Rule: If you’re under 75, you can contribute up to 3 years’ worth ($360,000) in one hit, then nothing for the next two years. Triggers if you go over $120,000 in a year.

• Tax Rate: Zero inside super—since it’s already taxed income.

• Example: Got $200,000 from a bonus? Pop it in under the bring-forward rule, and you’ve used $240,000 of your $360,000 limit.

Limit Check: If your total super balance hits $1.9 million (the 2025-26 general transfer balance cap), non-concessional contributions stop.

Bonus: The Carry-Forward Rule

Didn’t use your full concessional cap recently? The ATO’s carry-forward rule lets you roll over unused amounts from the past 5 years (since 2018-19).

• How It Works: Used $20,000 of your $30,000 cap in 2024-25? You’ve got $10,000 to carry forward, letting you contribute $40,000 in 2025-26.

• Eligibility: Your total super balance must be under $500,000 at June 30 of the previous year.

• Example: Had a quiet year contribution-wise? Stack extra in when cashflow allows.

  
  

What Happens if You Go Over?

• Concessional Excess: Added to your taxable income, taxed at your marginal rate (e.g., 37% for $135,001-$190,000), plus an interest charge. You can withdraw it to cover the tax.

• Non-Concessional Excess: Hit with a 47% tax (top rate + Medicare). Withdrawal’s an option, but earnings stay taxed.

• ATO Alert: They’ll flag it via your tax return—act quick to sort it out.

Tips to Stay on Track

• Monitor Contributions: Check your SG, salary sacrifice, and personal inputs via MyGov or your fund’s portal.

• Plan Big Moves: Using bring-forward? Time it early in the year for a clean 3-year cycle.

• Stay Updated

• Balance Matters: Nearing $1.9 million? Your contribution options change—pensions might come into play.

Scenarios to Ponder

• Early Career (30s): $60,000 earner gets $6,900 SG. Adds $5,000 salary sacrifice = $11,900 concessional—plenty of room.

• Mid-Career (50s): $150,000 earner gets $17,250 SG. Maxes out with $12,750 salary sacrifice = $30,000 concessional, plus $50,000 non-concessional.

• Pre-Retirement (60s): Drops $360,000 non-concessional from an inheritance under bring-forward.

These are just examples—your situation might look different.

Final Thoughts

Super contribution limits are your guardrails—stick to them, and you can grow your retirement savings with tax perks. Go off-road, and the taxman’s waiting. It’s worth keeping tabs on your contributions and the latest rules to get the best out of super. Need a plan that fits your life? Chat with a licensed financial adviser—they’ll crunch the numbers for you.

Disclaimer: This blog provides general financial information based on facts, not personal advice. It doesn’t consider your individual circumstances, goals, or needs. For tailored guidance, consult a licensed financial adviser. We aim for accuracy but aren’t liable for any decisions or losses based on this content. Use at your own risk.