How to boost your super

Making additional contributions to your super may not be top of mind, but did you know there are simple ways you can improve your retirement savings by boosting your super? NGS' Education Manager, James Perry, shares how you can work towards maximising your retirement savings no matter what stage of life you’re at.

How does super work?

From 1 July 2024, all Australians are entitled to 11.5% super contributions from their employers. This is called the Superannuation Guarantee (SG) and means 11.5% of your ordinary time earnings are paid by your employer into your super. SG contributions are scheduled to increase again on 1 July 2025 to 12%. On top of the contributions your employer makes to your super, you have the option to add more at any time to help boost your super savings.

When might you want to consider making extra contributions to your super?

If you’re financially flexible

'For those who are early in their career or at a point where they don't have large financial obligations,' says James. 'It can be a good time to start building a savings habit, which may include putting a small amount into your super. Even small amounts can make a big difference over time, all thanks to the power of compound interest.’

You can set this up as an automatic deduction from your pay, so you won’t even notice you’re doing it. This is called salary sacrifice. It's easy to arrange, simply speak to your payroll officer. There are limits on how much you can contribute to your super via salary sacrifice.

James shares an example of how this could work:

27-year-old Sally earns $85,000 a year and contributes $50 a week before tax (which would only mean $34 a week less in her pocket…more on this later). Sally could add an extra $100,000 to her super at retirement¹.

Read more about salary sacrifice.

If you’re looking to save tax

The government has reduced income tax rates for all working Australians from 1 July 2024. Even still, every dollar you earn over $45,000 will be taxed at somewhere between 32% and 47% (including the Medicare levy). If you contribute money to super as a before-tax contribution, it will only be taxed at 15%*.

James shares an example of how this could work:

Lucy, age 45, earns $120,000 a year and instructs her payroll officer to contribute an extra $200 per fortnight to her super as a before-tax contribution, she would have $134 less in her pocket each pay but an extra $170 in her super. If Lucy continued to do this through to the age of 67, she could have $100,000, more in her super at retirement as well as saving herself over $20,000 in tax along the way².

* If your combined income (including income and concessional super contributions) is $250K and above, the super contribution tax increases to 30%.

Buying your first home

If you are looking to buy your first home, you may be eligible for the First Home Super Saver scheme (FHSS), which enables you to make voluntary contributions to super that can be ultimately withdrawn, along with any deemed earnings, to go towards a deposit. ‘The benefit of the scheme is that you will be paying lower tax while saving for your deposit in your superannuation fund compared to if you were saving outside of superannuation,’ says James.

By paying lower tax you will be saving more money to go towards your deposit, meaning you may be able to save your deposit faster than without the scheme. If you are purchasing a property with someone who is not a first-time homeowner, you can still use the scheme.

Find out more about the FHSS.

Government co-contributions

If you're a low to middle-income earner and make after-tax super contributions, you may be eligible for a matching contribution from the government, called a co-contribution. To be eligible for the government co-contribution, you need to be earning less than $60,400 ³. The government will work out how much you are entitled to when you lodge your tax return. If you're eligible, the government will pay the co-contribution directly to your fund.

For example, if your total income in a financial year is $45,000 and you make an after-tax contribution to your super of $1,000 if you satisfy eligibility, the government will contribute an additional $500 to your super. This is regardless of your partner’s income. Try our calculator to see how much you could benefit.

If your partner can add to your super

If you are not working or unable to boost your super but your partner can, you could consider contribution splitting,’ says James. Contribution splitting allows your spouse to split certain super contributions paid to their account and transfer them to your super.

Learn more about contribution splitting.

Boosting your super may help you to enjoy a better lifestyle in retirement. However, if you’re unsure if making extra contributions to your super is right for you, you may benefit from speaking with an NGS Super Specialist. Our Super Specialists are here to help. It's free, and they can answer your questions about superannuation, investments, insurance or transition to retirement. They can also help you decide the next steps, including deciding if meeting with an NGS financial planner is right for you.

Book your free chat with a Super Specialist