Boost your super while trimming your tax

Pre-tax perks

Let’s start with concessional contributions, which include the super your employer pays and any extra amounts you choose to salary sacrifice. These are taxed at 15 per cent, which could be lower than your marginal tax rate. By channelling some of your pre-tax income into super (up to the annual cap of $30,000), you may reduce your taxable income and grow your nest egg at the same time. Double win.

You may also be entitled to Low Income Super Tax Offset (LISTO) if you earn less than $37,000 a year. This is where the government pays your super fund up to $500, which represents 15% of your concessional (before tax) super contributions you or your employer pays into your super fund.

After-tax advantage

Want to contribute more? You can also make non-concessional (after-tax) contributions of up to $120,000 per year. These don’t reduce your taxable income, but earnings inside super are taxed at a maximum of 15 per cent – which may still be lower than the rate applied to income or investments held outside super.

A little goes a long way

Even small, regular top-ups can add up over time thanks to compound interest. That’s where your money earns interest – and then that interest earns interest, too. The earlier you start, the more time your contributions have to grow. And if your income is under $62,488 for the 2025/26 financial year, you might also be eligible for a government co-contribution – up to $500 a year – just for putting a bit extra in. It’s basically a free boost to your retirement savings.

Don’t overdo it

There are annual contribution limits, so be mindful of the caps to avoid paying extra tax. And if you’re unsure what’s best for your situation, a chat with a financial adviser can help you make the most of super’s tax-friendly structure.

This article is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. The above information is not tax advice.

Taxation laws are complex and subject to change. Commonwealth Securities Limited (CommSec) does not provide tax (financial) advice under the Tax Agent Services Act 2009 (Cth). You should consider seeking independent tax advice from a registered tax agent, accountant or adviser before you make any decisions based on this information.

This information is not advice and is general in nature. The information has been prepared without taking account of the objectives , financial situation or needs of any particular individual. For this reason, any individual should, before acting on this information, consider the appropriateness of the information, having regards to the individual's objectives , financial situation or needs, and, if necessary, seek appropriate professional advice. You can view the CommSec Terms and Conditions, Product Disclosure Statements, Best Execution Statement and Financial Services Guide, and should consider them before making any decision about these products and services.

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