End of Financial Year (EOFY) is a good time to show your super some love. EOFY often gets us thinking about money and your super deserves its moment too. You don’t need to do everything but a few small moves now could make a big difference over time. Your future self will thank you.
A few EOFY super moves worth thinking about
- Add a little extra before 30 June (even small amounts can help over time).
- Choose the type of contribution that suits you.
- Check for potential extras, like government co-contributions.
Give your super a little boost (if it’s right for you)
If you have a little extra cash around 30 June, putting what you can into your super can be a powerful EOFY move. Contributions generally fall into two categories: concessional (before-tax) and non-concessional (after-tax).
Concessional contributions are generally taxed at a lower rate inside super and may reduce your taxable income – and that’s why they’re often the first choice.
Non-concessional contributions come from money you’ve already paid tax on. They don’t reduce your taxable income but they still help grow your retirement savings.
The best option depends on how you earn income, how much has already gone into your super this year and how close you are to EOFY deadlines. Rules and eligibility vary based on your personal circumstances, like your age, work situation and how you contribute.
- Concessional (before-tax) contributions
Before-tax contributions can be particularly effective because they may reduce your taxable income while helping grow your super. There are two main ways to make them, through salary sacrifice or by making personal contributions and claiming a tax deduction later.
Using salary sacrifice
Salary sacrifice means choosing to have part of your pre-tax salary (or sometimes an extra payment, like a bonus) paid into your super instead of your take home pay.
You’ll need to set this up with your employer. You complete a form or agreement and your employer pays money into your super on your behalf.
Salary sacrifice only applies to income you haven’t been paid yet. If you’re close to 30 June, there might only be limited time for changes to take effect. Check what your employer has already contributed this financial year as annual contribution caps apply.
Make a personal contribution and claim a tax deduction
You can also make a personal contribution using money from your take-home pay or savings. If you’re eligible, you can claim a tax deduction for that contribution when you lodge your tax return.
This can be a practical EOFY option if you have spare cash and want more flexibility than salary sacrifice allows.
You make a personal contribution directly to your super fund. To claim a tax deduction, you need to submit a ‘notice of intent to claim a tax deduction’ to your super fund and receive confirmation from your super fund before lodging your tax return.
Personal deductible contributions count toward your annual concessional (before-tax) contribution cap, so it’s worth checking how much you have contributed during the year. Super funds may also have processing cutoff dates close to 30 June, so acting earlier can help ensure your contribution counts this financial year.
For more information about claiming a tax deduction on your personal super contributions visit the Australian Taxation Office (ATO) website or speak with your registered tax agent.
Catchup contributions
If you’ve had a career break, worked part-time or didn’t contribute the full amount to your super in previous years for another reason, you might be able to add more now, using what’s called ‘catchup’ contributions.
If you’re eligible, you make a concessional contribution above the standard annual cap, using unused amounts from previous years.
Eligibility depends on your total super balance and contribution history. You can check your total super balance and contribution caps in ATO Online Services via myGov. This information is updated annually, so it may differ from your current super fund balance.
- Non-concessional (after-tax) contributions
After-tax contributions are made from money you’ve already paid tax on, like savings or income. These contributions are non‑concessional where no tax deduction is claimed and they can still help build your super balance over time.
This option may suit people who have already used their concessional (before-tax) options or don’t need a tax deduction right now.
You transfer money from your bank account into your super as an after-tax contribution.
Contribution caps apply and special rules may allow some people to contribute more within a shorter period. If you’re considering adding larger amounts, you’ll need to check the rules before transferring money.
Eligible for an extra boost?
In some cases, extra money may be available when you make an after-tax contribution. This can include:
- Government co-contributions, which may boost your super
- Spouse contributions, which may provide a tax offset to the contributing spouse.
You make a contribution as follows if you’re eligible.
- A personal after-tax contribution to receive the Government co-contribution
- A spouse contribution to receive the tax offset.
Eligibility is based on income and other factors and EOFY is a good time to check whether either option applies to you before 30 June. For more information about eligibility requirements, visit ato.gov.au.
EOFY actions can feel small in the moment but they’re often the building blocks of something bigger. Whether you top up your super, make the most of contribution rules or simply map out a clearer plan for the year ahead, the key is building the habit of checking in and making intentional choices.
Source: MLC