Many Australians are aware that there are limits on how much they can contribute to super each year. What many don’t realise is that, if you’re eligible, you may be able to make catch-up concessional contributions by using unused contribution caps from previous years.

For some people, this provides an opportunity to make up for years when they couldn’t afford to contribute to super. For others, it can be an effective tax-planning strategy in a year when their taxable income is unusually high.

Understanding how the rules work can help you make the most of both your superannuation and your tax position.

What are concessional contributions?

Concessional contributions are contributions made to your super from before-tax income, or contributions for which you claim a tax deduction. They are generally taxed at 15% when received by your super fund.

There are three main types:
• Employer contributions (including Super Guarantee and additional employer contributions).
• Salary sacrifice contributions.
• Personal tax-deductible contributions, where you make a personal contribution and claim a tax deduction after lodging the appropriate notice with your super fund.

All three count towards the same annual concessional contributions cap.

The annual concessional contributions cap

For the 2026–27 financial year, the annual concessional contributions cap is $32,500. This includes employer contributions, salary sacrifice contributions and personal tax-deductible contributions.

Why do people have unused contribution caps?

Many people don’t maximise their concessional contribution cap because they were studying, took parental leave, worked part-time, started a business or simply didn’t have enough spare cash to make additional super contributions. If your financial position has improved, the catch-up rules may allow you to make up for those missed opportunities.

How do catch-up concessional contributions work?

If you don’t use your full concessional contributions cap, the unused amount may generally be carried forward for up to five financial years, provided your total super balance is less than $500,000 at 30 June of the previous financial year. This means you may be able to contribute more than the current year’s concessional cap of $32,500 by using carried-forward amounts.

Catch-up contributions can also be a valuable tax planning strategy

If you receive a large bonus, sell an investment property or shares and realise a capital gain, or otherwise have an unusually high taxable income, a personal tax-deductible contribution using available catch-up cap amounts may reduce your taxable income while boosting your retirement savings. For many taxpayers, this means replacing income that could otherwise be taxed at up to 47% (including the Medicare levy) with contributions generally taxed at 15% within super (or 30% where Division 293 applies).

Example – Using catch-up contributions to help reduce tax on a capital gain

Jane has been employed full-time for many years. During that time, her employer made Superannuation Guarantee contributions on her behalf, but she never had enough spare cash to make additional salary sacrifice or personal deductible contributions to super.

As a result, she has accumulated unused concessional contribution cap amounts from previous financial years.

This year, Jane sells her rental property and makes a significant taxable capital gain. After confirming she is eligible to use the catch-up contribution rules, she makes a $50,000 personal tax-deductible contribution to her super fund using some of her available carried-forward concessional contribution cap amounts.

The contribution reduces her taxable income while increasing her retirement savings. Instead of paying personal income tax of up to 47% (including the Medicare levy) on that portion of her income, the contribution is generally taxed at 15% within her super fund (or 30% if Division 293 tax applies).

Don’t let your unused cap amounts expire

Unused concessional contribution cap amounts are only available for five financial years. The oldest available amounts are used first. If they are not used before they expire, they are lost permanently.

What about Division 293 tax?

If your income for Division 293 purposes exceeds $250,000, some or all of your concessional contributions may be subject to an additional 15% tax, increasing the effective tax on those contributions to 30%. Depending on your circumstances, concessional contributions may still provide a worthwhile tax outcome.

Is this strategy right for everyone?

Even if you are eligible to make catch-up contributions, before making additional contributions, consider whether you have sufficient cash flow, won’t need access to the money before retirement, and whether the strategy aligns with your broader financial goals.

It’s also important to think about how much you contribute. Having unused catch-up contribution cap amounts doesn’t necessarily mean you should use them all. The greatest tax benefit is generally achieved when concessional contributions are offset against income that would otherwise be taxed at a higher marginal tax rate than the tax applying to the contribution within your super fund.

Once your taxable income falls into the lower tax brackets, the benefit of claiming further tax deductions may reduce significantly. At that point, if your objective is simply to increase your retirement savings, it may be more tax-effective to make a non-concessional contribution instead.

Finally, remember that once money is contributed to super it generally cannot be accessed until you satisfy a condition of release. Before making a large contribution, make sure you have sufficient funds available for your current lifestyle, emergencies, debt repayments and other financial commitments.

How DFK Everalls can help

Catch-up concessional contributions can provide an excellent opportunity to strengthen your retirement savings while improving your tax position. At DFK Everalls, we can help confirm your eligibility, determine your available catch-up contribution amounts, and develop a contribution strategy that complements your broader tax, superannuation, and wealth-planning objectives.