As we approach the end of the financial year, now is an ideal time to review whether making additional superannuation contributions before 30 June could improve your long‑term retirement position and reduce your tax bill.
For many Australians, concessional contributions (also known as tax‑deductible contributions) are one of the most effective strategies available. Below, we outline seven key reasons why making extra super contributions before 30 June 2026 may be worth considering.
- Boost Your Super and Reduce Your Tax
Making a personal tax‑deductible super contribution can allow you to:
- Grow your retirement savings in a low‑tax environment, and
- Reduce your taxable income for the 2025/26 financial year.
These contributions can be particularly useful if you’ve received income from:
- Employment or bonuses
- Investment income
- Lump sum leave or termination payments
- Capital gains from selling an asset
Concessional contributions are generally taxed at 15% in super, which is often lower than personal income tax rates.
The PDC must be equal to or less than the client’s CC cap for the year. Also, the PDC cannot result in negative taxable income and shouldn’t reduce their taxable income below their effective tax-free threshold for 2025/26, which is:
- $22,575 for those not eligible for SAPTO, or
- $35,813 for singles and $31,888 for couples, who are eligible for SAPTO.
When making PDCs, it’s important that a ‘Notice of intent’ is lodged before the earlier of:
- when you lodge your tax return
- 30 June of the next financial year, and
- rolling over funds, withdrawing lump sums or commencing a pension.
Where a client is aged 67 to 74[1] at the time of making a personal contribution, they must meet the work test or work test exemption to claim a tax deduction.
- Manage a One‑Off Increase in Income
If you’ve had an unusually high‑income year — for example due to:
- The sale of an investment property
- A large capital gain
- A taxable lump sum payment
you may be able to reduce the tax impact by making additional concessional contributions before 30 June.
This allows you to move money into super at a lower tax rate while smoothing out spikes in taxable income.
- Use Unused Contribution Caps Before They Expire
Many people are eligible to use unused concessional contribution caps from the past five financial years. Importantly:
- Any unused cap from 2020/21 expires on 30 June 2026
- Once lost, it cannot be carried forward again
This makes the current year a critical opportunity for people who haven’t maximised their super contributions in previous years.
- Possibly Your Last Chance to Use Catch‑Up Contributions
If your total super balance is nearing $500,000, this year may be your final opportunity to use catch‑up (carry‑forward) concessional contributions.
Eligibility is based on your super balance at the previous 30 June. If your balance exceeds $500,000 next year, you may lose access to these rules — even if you’ve never used them before.
- Particularly Valuable for the Self‑Employed
If you’re self‑employed, a sole trader, or in a partnership:
- You’re not required to pay super for yourself, and
- Super is often overlooked in favour of reinvesting in the business.
A profitable year can present an opportunity to do both:
- Claim a tax deduction now, while
- Strengthening your long‑term retirement position.
- Extra Benefits for Lower Income Earners (Before Rates Change)
The 2025/26 year is the last year where income up to $45,000 is taxed at 16%, which is higher than the 15% contributions tax in super.
From next financial year, this rate falls further. This means:
- Making concessional contributions in 2025/26 can deliver a larger tax benefit than waiting.
Care is required to ensure contributions don’t reduce taxable income below effective tax‑free thresholds.
- Useful Strategy for Australians Living Overseas
Australians working overseas may still be taxed on:
- Australian rental income
- Other Australian‑sourced income
For non‑residents, tax often starts at 30% from the first dollar earned. Making concessional super contributions — taxed at 15% — can significantly reduce the overall tax paid on that income.
This strategy can be especially useful for temporary overseas assignments.
Important Rules to Be Aware Of
Before making any contribution:
- Contributions must be received by your super fund by 30 June
- A valid Notice of Intent to Claim a Deduction must be lodged and acknowledged
- Age‑based work test rules may apply between ages 67–74
- Contribution caps still apply, and excess contributions can be penalised
Advice is essential to ensure strategies are implemented correctly.
Final Thoughts
Super contributions are one of the most powerful — but time‑sensitive — strategies available as we approach 30 June. However, they’re not one‑size‑fits‑all and need to be aligned with your broader financial goals, tax position, and retirement plans.
If you’re unsure whether making additional super contributions is right for you, or how much you can contribute, now is the time to seek advice.
If you’d like to explore whether this strategy could benefit you, contact Priority1 Wealth Management to arrange a review before 30 June.
[1] 1 A personal contribution must be received by the super fund no later than 28 days after the end of the month when reaching age 75.