How to make voluntary super contributions

Most Australians will rely on their superannuation for income during retirement. So, it goes without saying, the more you have in your super, the more you’ll have to spend and enjoy when you stop working. You can boost your balance by making voluntary super contributions on top of your employer contributions. Voluntary super contributions not only increase your balance but can include tax advantages. Keep reading to find out how voluntary super contributions work, their benefits, and how to make them.

What are voluntary super contributions?

Voluntary super contributions are contributions you actively choose to make. They’re different to your employer contributions because they’re not compulsory. People make voluntary super contributions to give their super balance a boost, so they can have more money to enjoy when they retire.

There are 2 main types of voluntary superannuation contributions: after-tax (or non-concessional) and before-tax (concessional).

After-tax contributions — If you’re employed, your take-home pay has usually had PAYG tax deducted from it. If you contribute to super with that money, it will be an after-tax contribution, also known as a non-concessional contribution.

Before-tax contributions — Also known as concessional contributions, these are made with money that hasn’t been taxed yet. Your super guarantee (SG) employer contributions fall under this category, but you can also choose to make personal before-tax contributions.

Each type of voluntary contribution comes with its own set of benefits, rules and limits. It’s important to understand these before making personal super contributions.

Benefits of voluntary super contributions

After-tax contributions

Since you’ve paid tax on this money already, after-tax contributions aren’t taxed again within super. And, depending on your income, the government could reward your after-tax contribution by adding up to $500 to your super. Our fact sheet on government co-contributions can help you work out if you’re eligible for this bonus.

There are age rules and limits on how much you can add to super with after-tax contributions. You can read more about these rules in our fact sheet Opportunities and limits for super contributions.

Before-tax contributions

Before-tax contributions are made with money that:

• hasn’t had income tax deducted yet or
• you will claim a tax deduction on.

Unlike after-tax contributions, before-tax contributions are taxed within super. However, the advantage is that they’re taxed concessionally at 15%, which is often less than the marginal tax rate for many people. Another advantage is that before-tax contributions effectively reduce your taxable income amount so you don’t pay extra tax.

How to make after-tax super contributions

At NGS, there are a few ways you can make after-tax contributions to your super:

• use your unique BPAY® reference number found in your Member Online account to contribute through your internet banking
• ask your employer to deduct a regular amount from your take-home pay by completing a Payroll deductions authority form
• attach a cheque to a completed Lump sum contribution form.

You can also use after-tax contributions to help boost your partner’s super.

There are limits on how much you can contribute to super with after-tax money. Find out more in our fact sheet Opportunities and limits for super contributions.

How to make before-tax super contributions

You can make before-tax super contributions a couple of ways. Regular before-tax deposits to super are normally known as salary sacrifice arrangements. To set salary sacrifice contributions up for your NGS account, you’ll need to complete our online contribution form and give it to your employer.

If you’d rather make one-off contributions when it suits you, follow the process for an after-tax contribution and then make sure you submit the paperwork to claim a tax deduction on the amount — this will change the contribution from after-tax to before-tax. Claiming a tax deduction is only available to eligible members and the timing for your tax deduction claim is crucial, so make sure you read about the full process before submitting anything.

There are limits on how much you can add to super with before-tax money. Find out more in our fact sheet Opportunities and limits for super contributions.

Frequently asked questions

How much can I voluntarily contribute to super?

This depends on whether you make before-tax or after-tax contributions. For current limits, you should read out fact sheet Opportunities and limits for super contributions.

Does my super grow if I don’t make voluntary contributions?

If you’re working, your super will grow as your employer must contribute 11.5%¹ of your pay to your super. Your super fund will then invest your money to earn returns over time.

Without voluntary contributions, the rate of growth will likely be slower, and — depending on when you’d like to retire, how long for, and what you’d like to do in retirement — you may not end up with the amount you want or need. You can use our calculator to see the difference that voluntary super contributions could make to your future super balance.

You should also note that the growth of your super will depend on things like how much you’re paid, whether you take career breaks, and how your super is invested. We have a range of investment options to suit different investment timeframes, goals and comfort with risk. To check what you’re invested in or change your investment options, log in to Member Online.

Is it worth making voluntary super contributions?

The answer to this will be different for everyone — you need to assess whether voluntary super contributions will work for your current situation and competing cash flow needs. If you’re in a position to add more to your super, it’s a great way to help secure your future. If you’re unsure whether voluntary super contributions are right for you, or which type to make, think about using our advice services. Your first appointment with an NGS Financial Planner is complimentary.