What is a concessional super contribution?

There are a range of voluntary contributions you can make to your superannuation fund (which you can find out more about on our YouTube channel) but today we’re talking concessional contributions.

Concessional contributions are extra contributions made to your super that somebody is claiming a tax deduction on.

This includes:

•       Compulsory contributions - made to your super by your employer

•       Salary sacrifice contributions - where you’re making extra payments straight from your pay packet to your super); and

•       Personal contributions - where you’re making extra payments from your own pocket and claiming a tax deduction on that.

So why do I recommend people use concessional contributions as much as possible?

Because when money goes into your super fund, it’s only taxed at 15%. Compared to the company tax rate of 30% or your personal tax rate, which could be anywhere from 35-47%, that’s a lot less tax you’re paying if your money is sitting in your super fund than in your bank account.

What’s the difference between a concessional and non-concessional contribution? You can learn all about non-concessional contributions on our YouTube channel, check out our blog for more superannuation tips or give us a call today to find out more about optimising your super.