End of Financial Year Superannuation Reminders

With End of Financial Year (EOFY) fast approaching, it’s important to reflect on the different ways you can add to Superannuation to take advantage of the tax benefits available.

So how can you add to Superannuation? We explain below.

Please be mindful, with any financial strategy the devil is in the detail.  We have highlighted some high level ideas to whet your appetite. For the purposes of keeping it simple we have not covered all eligibility criteria in this article.  It’s worth reaching out to your adviser to see how they apply to you.

Concessional Contributions

Concessional contributions refer to pre-tax contributions made to your superannuation account each financial year. These contributions are typically made up of:

• Employer contributions (Superannuation Guarantee payments).
• Salary sacrifice contributions.
• Lump sum personal contributions for which you can claim a tax deduction.

For the 2025-2026 financial year, the concessional contribution cap will remain at $30,000. Personal contributions within this cap are taxed at a concessional rate of 15% and will reduce your taxable income by the corresponding amount. Given the concessional contribution tax rate is generally lower than most working Australians marginal tax rate, there is a distinct tax benefit to add to Super via this method. 

The personal marginal tax bracket for those earning between $18,201-$45,000 is 16%. This makes it far less attractive for income earners below $45,000 to make concessional contributions.

Please be mindful that the Superannuation Guarantee payment made by your employer will be increasing from 11.5% to 12% from 1 July. It is important to review your concessional contribution strategy to ensure you are making the most of the provision without exceeding the cap. 

Want to add more than the annual cap? There may be capacity under the carry-forward provision.

Concessional Carry-forward provision

In the 2018-19 financial year, the Government enacted new legislation that allows individuals who have less than $500,000 inside Superannuation to ‘carry forward’ any unused portion of their annual Concessional Contribution cap.  The carry forward provision includes unused cap space extending back 5 years from the current financial year.

Using the carry-forward contribution rules can be beneficial when:

• You wish to boost your superannuation in the lead-up to retirement.
• You have realised a large capital gain and wish to make a significant tax-deductible contribution.
• Your taxable income is above $45,000 and you wish to reduce your income tax liability.

You should consider the restrictions that apply to accessing your super when assessing this strategy. If the above criteria apply to you, and you’re on the cusp of retirement, or already retired, there could be material tax savings to consider. If you think the Carry-forward provision could benefit you, please contact our office to discuss this strategy in more detail.

Government Co-Contribution

If you are working and have taxable income under $45,400 then you can make a $1,000 after-tax (non-concessional) contribution to your super account and the Government will automatically credit your account with $500.

The benefit is scaled down until your taxable income reaches $60,400 where no co-contribution is payable.  There are quite a few other eligibility criteria and we recommend you read the ATO article here or speak to your adviser.

Spouse contribution

You can take up to $3,000 from any of your bank accounts and contribute it to super in your spouse’s name.  They will be thrilled with an increased super balance, and you will get a tax offset representing 18% of your contribution, up to a maximum $540.  It’s important to bear in mind your spouse’s income needs to be under $37,000 for you to get the full benefit and under $40,000 to get any benefit at all.

Again, these are basic rules, however there are more eligibility criteria to consider before before committing to a spouse contribution.

Transfer Balance Cap

The ‘Transfer Balance Cap’ (TBC) limits the amount you can hold in tax free Superannuation income stream accounts.  The current General TBC is $1.9 million, and from 1 July 2025, will increase to $2 million. 

Individuals starting a pension for the first time on or after 1 July 2025 will be entitled to a full personal TBC of $2 million.

However, people who have held or commenced an account-based pension prior to 1 July 2025 will have a different personal TBC.  Their TBC cap increase will be a proportion of the $100,000 and will depend on their unused cap space.

For example, in the 2023 financial year the transfer balance cap was $1.7 million. If John commenced an account-based pension with $1.6 million in that financial year, he would have $100,000 or 5% cap space left.

With recent indexations amounting to $200,000, John would not have this as additional cap space, rather, his cap space would increase by 5% or $10,000.  John can now commence an account based pension with a further $110,000.

Any surplus funds in excess of your TBC must be kept in ‘Accumulation’ phase or invested outside Superannuation.

It is important to review your transfer balance cap when it is indexed to ensure you are making the most of tax-free earnings generated by Superannuation and pension phase.

Contact Muirfield Financial Services

Feel free to implement any of these contribution strategies yourself, however, be warned, we’ve only provided some of the high level eligibility criteria.

Alternatively, we can help review your financial situation and help you optimise your position when it comes to saving tax with your super.