What Are Non-Concessional Contributions?

Jamie Walsh • March 7, 2025

What Are Non-Concessional Contributions?

Non-concessional contributions are an important way to boost your superannuation savings using after-tax money. These contributions allow you to grow your retirement nest egg without being taxed again within your super fund.

Key Features of Non-Concessional Contributions

Made from After-Tax Income: Unlike concessional contributions, non-concessional contributions come from your income that has already been taxed. Because of this, these contributions are not taxed within your super fund.
Contribution Cap: The annual cap for non-concessional contributions is $120,000 per year. However, if you’re under 75, you may be eligible to use the bring-forward rule. This allows you to contribute up to $360,000 over a three-year period.
No Immediate Tax Benefit: Since these contributions are made from after-tax income, they do not reduce your taxable income. However, they grow within your super fund, where earnings are taxed at a concessional rate of 15%.

Who Benefits from Non-Concessional Contributions?

Non-concessional contributions are ideal for individuals who want to make additional contributions to their super after maximising their concessional contributions. They are also useful for people receiving inheritances, selling assets, or looking to invest surplus funds for retirement.

Contribution Limits and Penalties

It is essential to stay within the contribution cap to avoid extra tax. If you exceed the cap, the excess contributions may be taxed at your marginal tax rate less a 15% rebate to reflect the tax already paid by the fund.

Restrictions

There are some restrictions on making non-concessional contributions:

You cannot make these contributions if your total super balance exceeds $1.9 million.
Contributions must be made before the age of 75, and additional rules apply for those aged 67 to 74 if you are claiming a tax deduction.

Non-concessional contributions can be a great way to boost your retirement savings, but it’s crucial to plan carefully and stay within the caps. Consider consulting a financial adviser to ensure your strategy aligns with your retirement goals and complies with the rules.

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