Contribution Caps: Concessional vs Non-Concessional Strategies

Quick Look

Focus: Understand how to maximise your super contributions without breaching the caps.

Key Takeaways :

The concessional contributions cap is $30,000 per year, and you may carry forward unused cap space over a five-year period.
The non-concessional contributions cap is $120,000 per year, with bring-forward rules allowing up to $360,000 in one go for each member.
Smart contribution strategies can reduce tax and accelerate your super growth.
Reading Time: ≈ 6minutes

Introduction

Contributing to superannuation can be one of the most tax-effective ways to build your retirement savings—but it’s not a free-for-all. The Australian Government sets annual contribution caps and breaching them can lead to extra tax and paperwork.

Understanding the difference between concessional and non-concessional contributions—and the rules that apply to each—puts you in a stronger position to grow your super strategically, especially as you near retirement.

Context & Problem

Super contributions are capped to ensure tax benefits are used fairly. The caps reset each financial year, but there are rules that allow you to bring forward future limits or catch up on unused caps—if you qualify.

The problem is many Australians either under-contribute (missing out on tax perks) or accidentally over – contribute (triggering normal personal tax rates). Knowing how the system works now helps you avoid costly mistakes and make the most of available opportunities.

Strategy & How To

Concessional Contributions–Tax-Deductible

Includes:

Employer SG contributions.
Salary sacrifice
Personal contributions you claim a tax deduction for

Cap: $30,000 per year (ATO, updated 1 July 2024)

Tax treatment: Taxed at 15% going into super (vs your personal marginal rate, which may be higher).

Tactic: Carry Forward Unused Caps

If your total super balance is under $500,000 on 30 June of the previous financial year, you can carry forward any unused contribution amounts for up to 5 years.

Example: If you only used $15,000 last year, you can contribute an extra $15,000 this year—on top of your $30,000.

When it helps:

Irregular income years
Selling an asset or receiving a bonus
Catching up after a career break

Non-Concessional Contributions –After -Tax Money

Includes:

Contributions from your savings, inheritance, or proceeds from asset sales
No tax deduction claimed

Cap: $120,000 per year (ATO, updated 1 July 2024)

Tactic: Bring-Forward Rule

If you’re under 75 and meet the total super balance test, you may contribute up to $360,000 for three years in one go.

Eligibility based on total super balance on 30 June prior:

Under $1.66 million: Full $360,000
$1.66m–$1.78m: Up to $240,000
$1.78m–$1.9m: Up to $120,000
$1.9m+: No non-concessional contributions allowed

When it helps:

Selling an asset
Inheritance
Wanting to boost your super before retirement from savings

Optimisation Tips

Split concessional contributions with your spouse to equalise balances and reduce future tax on withdrawals
Watch your total super balance— going over $1.9 million (as at 30 June 2024) restricts your ability to make further non-concessional contributions
Avoid excess contributions tax—track all contributions, especially when using multiple strategies
Consider tax timing— strategic contributions in high-income years may provide better deductions

Case Study

Case: Pre-Retirement Catch-Up Amal, aged 58, had a super balance of $420,000 and earned $120,000 annually. Over the previous three years, she only contributed $15,000/year in SG, leaving $37,500 in unused concessional cap. In 2024–25, she sells an investment property and in addition to her employer SG of $13,800, uses $20,000 from the proceeds to make a tax-deductible personal contribution. She also salary sacrifices $3,700. That makes up her total of $37,500—equal to her carried forward concessional cap Outcome: Claims $23,700 personal deduction, reducing taxable income Pays 15% contribution tax instead of 34.5% marginal rate Super grows tax-effectively, and no excess contributions

Common Questions & Misconceptions

Can I use both carry - forward and bring - forward rules at the same time?

Yes — if eligible. They apply to different caps. But you must track contributions carefully to avoid breaching either cap.

What happens if I go over the cap ?

Excess contributions may be taxed at your marginal rate, and you could be charged an interest penalty. You can choose to withdraw the excess to avoid double taxation

Is there a limit to how much super I can have overall?

Yes. Your total super balance affects your eligibility for certain strategies. The current thresholds are$500,000for carry forward Concessional contributions and$1.9 million for Non-concessional contributions

Are these caps indexed?

Yes. Both concessional and non-concessional caps are linked to average weekly earnings and reviewed annually. Check the ATO website each July.

Conclusion

Knowing the difference between concessional and non-concessional contributions—and how to legally contribute more through carry-forward or bring-forward rules—gives you more control over your retirement savings. These caps exist for good reason, but they’re also flexible when used wisely.

The key is understanding your limits, checking your total super balance, and getting guidance before making large or complex contributions. Done right, these strategies can make a big difference.

Looking to grow your super with help from the government?

moneyGPS provides a personalised overview of how co-contributions work, including:

Personalised recommendations based on your own figures
How personal after-tax contributions can be boosted
A tailored Statement of Advice based on your circumstances

Available online for $55. You can explore the platform for free and get the advice when you’re ready.

Need Full Scope Financial Planning?

If you think you might need a holistic roadmap that leaves nothing out, consider booking a discovery meeting with a fully licensed Financial Planner.

Work one on one with the Planner
Get ongoing support through every stage of your financial journey

Book a discovery call with Planning IQ today and take the first confident step towards comprehensive wealth management.

Disclosure: General information only. Consider your objectives, financial situation and needs, and seek professional advice before acting.

How We Keep It Trustworthy

Every article includes a Review & Fact Check section below—so you know exactly where our facts come from, what’s uncertain, and whether there’s any bias.

Common Questions & Misconceptions

1. Fact References

Concessional cap: $30,000–Australian Taxation Office (ato.gov.au), updated 1 July2024
Non-concessional cap: $120,000–Australian Taxation Office (ato.gov.au), updated 1July 2024
Bring-forward and carry-forward rules–Australian Taxation Office (ato.gov.au)
Total super balance thresholds–Australian Taxation Office (ato.gov.au)

2. Unverified or Inconclusive Items

Example case study (Amal) is illustrative only and not based on a verifiable real case

3. Time Sensitivity

Super caps and thresholds are reviewed and may change on1July each financial year

4. Bias Assessment

Neutral and educational. Soft promotion for Money GPS and Planning IQ is included and disclosed appropriately for general audience suitability.