Tips to boost your super with carry forward contributions
When your employer pays 11.5% of your salary into your super fund, it’s called a concessional contribution. Instead of paying your full marginal tax rate on the contribution, you only pay 15%.
This tax concession is one of the things that makes super such a great investment, but of course there’s a catch: you can only put up to a certain amount into super each year at this concessional rate.
This cap has been increasing over the years, and from 1 July 2024, it hit $30,000.
So, what happens if you don’t reach this cap?
Not always reaching the concessional contributions cap?
Have a look at your super contributions over the last five years. If you haven’t reached the cap in any year, then you can contribute some or all the difference as a voluntary contribution this year and still get the concessional tax rate.
For instance, if you contributed $20,000 last year (when the cap was $27,500), you’ve got $7,500 of unused concessional contributions to play with this year. This means you could put in up to $37,500 at the 15% tax rate.
This is called a carry-forward contribution, and it’s a great way to boost your super.
Am I eligible for carry-forward contributions?
You can only use carry-forward contributions if:
- Your total super balance (the value of all your super in any super funds you may have) is under $500,000 at 30 June of the previous financial year; and
- You didn’t reach the cap in any of the last five years.
Only the most recent five years count, so if you have an unused cap amount from the 2019-20 financial year, the opportunity will be gone if it is not used by the end of the 2024-25 financial year.
There’s a lot to all this, so if you want to dive deeper beyond what’s summarised in this blog, you can read more about it on the ATO site here. If you’re ready to find out whether you have any carry-forward amounts available, log in to the ATO online services and choose Super → Information → Carry forward concessional contributions.
Here's an example:
Maria has $280,000 in super, here are her contributions for the last five years:
Year | Concessional contributions | Concessional cap for each year | Unused concessional amounts |
---|---|---|---|
$18,000 | $25,000 | $7,000 | |
$20,000 | $25,000 | $5,000 | |
$20,000 | $27,500 | $7,500 | |
$25,000 | $27,500 | $2,500 | |
$27,000 | $27,500 | $0 | |
$22,000 |
In the first four years, Maria didn’t reach the cap, making a total of $22,000 that she could have contributed at the 15% tax rate.
In 2025, Maria’s boss pays her a bonus and she’s looking for somewhere to invest it. Because she didn’t reach the cap in four of the past five years, she can put up to $22,000 into her super before 30 June 2025, and only pay 15% tax on that amount.
Importantly, this is on top of the $30,000 concessional amount for this year, so Maria could put in $52,000 and apply to pay 15% tax on it.
Why use carry-forward contributions?
If you haven’t reached your concessional cap in any of the last five years and you meet the other eligibility criteria, this is a neat way to boost your super while making a decent tax saving.
Even if you’re already contributing $30,000 a year to your super, if you didn’t hit the cap in the last five years you could contribute more than $30,000 and still only pay 15% tax.
Please note there are tax consequences if you exceed the caps.
Get some personal advice
As with any investments, before you take the plunge, you may want to discuss your options with your financial adviser. They can give you advice specific to your personal financial situation, and tell you exactly how using carry-forward contributions could reduce your tax.
For more information, visit the ATO’s website.
This information is general advice only and is not intended to provide you with financial advice or take into account your personal objectives, financial situation or needs. Before acting on the information, consider its appropriateness to your circumstances and read the Financial Services Guide (FSG), product disclosure statement (PDS) and Target Market Determination (TMD) available on our website. You may wish to seek financial advice from an authorised financial adviser before making an investment decision. Past performance is not a reliable indicator of future performance. Interests in the Australian Ethical Retail Superannuation Fund (ABN 49 633 667 743, USI AET0100AU) are offered by Australian Ethical Investment Limited (ABN 47 003 188 930, AFSL 229949) and issued by the Trustee of the Fund, Australian Ethical Superannuation Pty Limited (ABN 43 079 259 733, RSE L0001441, ASFL 526 055).
Superannuation is a means of saving for retirement, which is, in part, compulsory. The government has placed restrictions on when you can access your investments held in superannuation. The Government has set caps on the amount of money that you can add to your superannuation each year and over your lifetime 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 registered tax agent or visit the ATO website.