As you progress through your working life, saving for retirement takes an increasing priority if you are seeking to continue a comfortable life when you retire from work.

Aside from the Age Pension provided by the government, Australian Superannuation provides a solid platform for you to bolster your retirement savings. There are two ways in which you can grow your Superannuation fund and these are through investment growth and also the amount you contribute/save to it.

In this article, we will cover the main things you need to know when contributing to your Superannuation Fund.

• Concessional Contributions – These are classed as ‘Deductible Contributions’ because tax is deducted from the fund, before the contribution is applied to your Super Fund. The Superannuation provider will deduct tax at the ‘concessional’ rate of 15% and pay the Australian Tax Office (ATO) on your behalf. If you earn over $250,000 then you may be required to pay an additional 15% tax under the ‘Division 293’ tax rule. The maximum ‘concessional’ contribution you can make, each financial year, is $25,000. However, from July 2018, a new rule was introduced that allows individuals who have a super balance of less than $500,000, to carry forward any unused allowance for up to 5 years.

• Non-Concessional Contributions – These are contributions where a tax deduction is not claimed. Examples of these can be transfers from an overseas pension scheme, spouse contributions, government co-contributions and some personal contributions where a tax deduction has not been claimed. A maximum non-concessional contribution of $100,000 per financial year is permitted without penalty. It is also possible to ‘bring forward’ a further two years of the allowance, providing you with a total of $300,000. Any excess contributions above the limit will be taxed at 45%.