End of financial year super strategies

The end of the financial year is the ideal time to think about how to get your super working harder and start saving more for retirement.

Many people refer to super as something they’ll think about when they get close to retirement. But by then it’s too late. Your super is likely to be your second largest asset after your home, so it deserves to receive more of your attention much earlier. And there’s no time like the end of financial year to get started.

Here are seven superannuation strategies to help it work harder for you at this end of financial year.

Superannuation strategy 1: Maximise your tax-deductible super contributions

In addition to the Superannuation Guarantee contributions your employer makes into your super, you can make personal super contributions. You might even be able to claim a tax deduction for them too. 

To claim a deduction, you must give a notice to the Trustee of your super fund and have it acknowledged by them. Your age, sources of income, any salary sacrifice and certain other employer contributions can all affect your eligibility, so it’s worth having all this information to hand at tax time. 

It may be a great way to pay less tax while saving more for your future. 

Keep in mind that personal deductible super contributions count towards your annual before-tax (or concessional) contributions cap. This is currently $25,000 per financial year and any contributions you make above this limit will attract additional tax.

Superannuation strategy 2: Use salary sacrifice to top up your super

Salary sacrifice is an arrangement you make with your employer to effectively ‘give up’ part of your before-tax salary and have it paid into your super account instead. 

Not only is this an effective way to boost your super and help you save for retirement but there may also be additional tax advantages for you, depending on how much you earn.

To see if it’s right for you, create a budget to work out how much you can afford to contribute to your super from each pay packet and speak to your employer about helping you set this up.

As with all contributions into super, there’s a limit on how much you can pay into your super and still receive favourable tax treatment. Salary sacrifice contributions count towards your $25,000 concessional contributions cap each financial year so be careful not to exceed the overall limit.

Superannuation strategy 3: Consider making a one-off contribution

After-tax, or non-concessional, super contributions are those you make from money you’ve already paid income tax on and therefore won't be claiming a tax deduction for. 

The advantage of this strategy is in the way your investment earnings are taxed. Within super, you’ll pay up to 15% tax on any investment growth rather than your marginal tax rate, which applies to any investments you hold outside of super. You should be aware, depending on your income level, your marginal tax rate may be less than 15%.

The annual limit for after-tax contributions is currently $100,000, provided your total superannuation balance is below $1.6 million at the start of the financial year. 

In certain circumstances, you may be able to bring forward three years of after-tax contributions into one year. This would allow you to contribute up to $300,000 if you haven't triggered the rule in the previous two years and your total superannuation balance is below $1.6 million on 30 June at the end of the previous financial year. 

If your super balance is close to $1.6 million, you’ll only be able bring-forward the annual contribution caps that would allow your balance to reach $1.6 million.

Superannuation strategy 4: Check your eligibility for a Government co-contribution

Investing in super isn’t just a strategy for the wealthy to enjoy tax benefits. The Government is keen to ensure middle to low-income earners also benefit. 

In the 2019/20 financial year, adding to your super from after-tax money could see you entitled to a government co-contribution worth up to $500 if you earn less than $53,564 and are aged below 71 at 30 June 2020. You must also have a total superannuation balance of less than $1.6 million at the start of the financial year to be eligible.

The Government will make the maximum co-contribution of up to $500 if you earn less than $38,564 in the 2019/20 financial year and you’ve made a contribution of at least $1,000. The co-contribution amount reduces as your income rises and until it reaches zero at an annual income of $53,564.

Superannuation strategy 5: Investigate the spouse super contribution tax offset 

If your spouse or partner is a middle or low-income earner and their assessable income is less than $40,000 in a financial year, you could make super contributions on their behalf and potentially claim a tax offset for yourself. A potential win for everybody.

For spouse or partners who earn less than $37,000, the maximum tax offset is $540 in the 2019/20 financial year. This amount progressively reduces until it reaches zero where the spouse/partner earns over $40,000 in a year.

Superannuation strategy 6: Capitalise on tax efficiencies to save for your first home

Younger generations have the potential to benefit from super before they reach retirement age. 

If you’re saving for your first home, the First Home Super Saver Scheme (FHSSS), which started on 1 July 2017, enables you to make voluntary superannuation contributions to help save for a deposit on your first home. These contributions, and any associated investment growth, can be accessed subject to eligibility criteria. The total you can contribute and save towards the FHSSS is capped at $15,000 a year, and the maximum you can access is capped at $30,000.

The contributions can be before or after-tax personal contributions. Superannuation Guarantee contributions and those over the contribution caps can’t be accessed under the FHSSS. 

Superannuation strategy 7: Take advantage of the downsizing opportunity

If you’re aged 65 or over and you’re thinking about downsizing the family home you’ve lived in for 10 years or more, you (and your spouse or partner) may both be able to contribute up to $300,000 from the sale proceeds to your superannuation.

Known as a downsizer contribution, this doesn’t count towards your before or after-tax contribution caps or the limit on your total superannuation balance. It’s a timely extra boost for those nearing or in retirement.

Don’t get caught out

While these strategies can be an effective way to grow your super, always remember the Government imposes strict annual limits on the amount you can contribute to your super each year. 

So, before you make any additional contributions, make sure you know much you’ve already added to your super account(s) during the financial year. And don’t forget, any additional contributions must be in your account before 30 June or they’ll be counted against the next financial year’s annual limits.

Next: Boost your super

Learn about contributing to your superannuation and the caps that apply.
Take control of your super today to potentially enjoy a more financially rewarding retirement. By the time you retire, your super could be one of your most valuable assets.
Consolidating your super means transferring multiple balances into a single super account. It makes it easier to keep track of your super savings and could see you save on account keeping fees.
Billions of dollars are sitting in lost and unclaimed super accounts. Some of that money could be yours. We explain how to be reunited with any lost super.


This article was prepared by BT, a part of Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian Credit Licence 233714 (Westpac). 

This information has been prepared without taking account of your personal objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This document provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.  Superannuation is a means of saving for retirement, which is, in part, compulsory. The government has placed restrictions on when you can access your investment held in superannuation. The Government has set caps on the amount of money that you can add to superannuation each year on both a concessional and non-concessional tax basis.  There will be tax consequences if you breach these caps.  For more detail, speak with a financial adviser or visit the ATO website.  BT cannot give tax advice. Any tax considerations outlined in this article are general statements, based on an interpretation of the current tax law, and do not constitute tax advice. The tax implications of superannuation can impact individual situations differently and you should seek specific tax advice from a registered tax agent or registered tax (financial) adviser.