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. 

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.

Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information.

Commonwealth Securities Limited (CommSec) is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 (Cth) and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law. For the latest information, check the ATO website or speak to your accountant or financial advisor.

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