As the end of the financial year approaches, it may be worth considering making an extra lump-sum contribution into your superannuation fund and claiming a tax deduction.
If your superannuation balance was under $500,000 as at June 30, 2025, and you have not contributed the maximum concessional (tax-deductible) amount in the previous five years, then you may be entitled to use some of those previous unused caps to take your concessional contributions over $30,000 this year. Concessional contributions are taxed at just 15 per cent, far lower than most people’s marginal tax rates.
Careful planning is necessary to make the most of this concession, as it is certainly not one-size-fits-all. You also need to consider your position in future years as they will be affected.
To use up an unused cap from a previous year you must first use up your full $30,000 for this year. Once you have gone over the $30,000 for this year, any excess reduces the unused cap for the 2020-2021 year, then the 2021-2022 year, etc. Using up the 2020-2021 cap is important because next year it will no longer be available.
If you are already around the $30,000 mark, for this year, there is nothing to lose by soaking up that 2020-2021 unused balance. If you are nowhere near the $30,000 mark this year, your decision needs to consider future years, as using up this year’s cap makes less available in the future.
