Superannuation Power Moves for High Earners Before June 30: Part 1
If you're earning over $180,000 and paying nearly half your income in tax, superannuation remains your most powerful wealth-building tool. Yet most high earners barely scratch the surface of what's possible with strategic super contributions.
The Australian taxation system is designed to encourage retirement savings through superannuation, offering one of the most generous tax concessions available. For high-income earners sitting in the top marginal tax bracket of 47% (including the Medicare Levy), the difference between super's 15% contributions tax environment and your personal tax rate represents a 32 percentage point saving on every dollar contributed.
Despite these compelling numbers, research consistently shows that high earners often fail to maximise their superannuation opportunities. Whether due to lack of awareness, procrastination, or simply being too busy building their careers, many professionals leave tens of thousands of dollars in potential tax savings on the table each year.
With June 30 approaching, here are three superannuation strategies that could save you tens of thousands in tax while turbocharging your retirement savings.
Strategy 1: Max Out Your Concessional Contributions (And Use Carry-Forward Rules)
The concessional contribution cap is $30,000 per year, and contributions are taxed at just 15% inside super. For someone in the 47% tax bracket, that's a 32% tax saving on every dollar contributed—a return that's impossible to find anywhere else in the financial markets with zero risk.
The Standard Play: Understanding Concessional Contributions
Concessional contributions include:
Employer superannuation guarantee (SG) contributions (currently 11.5% of your ordinary time earnings)
Additional employer contributions beyond the SG
Salary sacrifice contributions
Personal deductible contributions (where you claim a tax deduction)
Most high earners contribute through salary sacrifice or employer contributions. If you're not reaching the $30,000 cap, you're leaving money on the table. Let's look at the mathematics:
If you earn $200,000 and your employer contributes the standard 11.5% SG ($23,000), you still have $7,000 of unused concessional cap space. By salary sacrificing that additional $7,000:
You reduce your taxable income by $7,000
You save $3,290 in personal tax (47% of $7,000)
Your super fund pays $1,050 in contributions tax (15% of $7,000)
Net benefit: $2,240 in your pocket, plus $5,950 growing in your super
That's a guaranteed 32% return before your super investments earn a single dollar. No investment strategy in the world offers that kind of risk-free return.
The Advanced Play: Carry-Forward Provisions
The carry-forward provision, introduced in 2018-19, allows you to use unused concessional cap amounts from previous financial years, dating back to 2018-19. This means you could potentially contribute significantly more than $30,000 this year.
Eligibility Requirements:
Your total superannuation balance must be less than $500,000 on June 30 of the previous financial year
You can only carry forward unused amounts from 2018-19 onwards
Unused amounts expire after five years
How It Works:
Let's say you only contributed $20,000 in each of the past three years through your employer's standard contributions. That's $10,000 of unused cap space per year, or $30,000 in total carried forward. This year, you could contribute up to $60,000 in concessional contributions ($30,000 current year cap plus $30,000 carried forward), provided your total super balance is below $500,000.
Real-World Example: Person A
Person A, a 42-year-old specialist, earns $350,000 annually. Her employer has contributed the mandatory SG of approximately $22,000 per year for the past four years, leaving significant unused cap space.
Her superannuation balance on June 30 last year was $420,000 (below the $500,000 threshold).
Her carry-forward calculation:
2020-21: $25,000 cap - $22,000 contributed = $3,000 unused
2021-22: $27,500 cap - $22,000 contributed = $5,500 unused
2022-23: $27,500 cap - $22,000 contributed = $5,500 unused
2023-24: $30,000 cap - $22,000 contributed = $8,000 unused
Total carry-forward available: $22,000
Current year cap: $30,000
Total available for 2024-25: $52,000
Person A's employer will contribute approximately $22,000 this year, leaving her with $30,000 she could contribute via salary sacrifice or personal deductible contribution before June 30.
The Tax Impact:
On a $30,000 additional contribution:
Tax saved at personal rate: $14,100 (47% of $30,000)
Tax paid by super fund: $4,500 (15% of $30,000)
Net tax benefit: $9,600
Amount added to super: $25,500 ($30,000 minus $4,500 contributions tax)
Over 20 years at a conservative 7% return, that $25,500 grows to approximately $98,650. If Person A had invested that same $30,000 outside super and paid tax at 47% on earnings, reducing her effective return to approximately 3.7%, the balance would only grow to $61,600.
The difference: $37,050 simply from the tax-advantaged environment.
Important Considerations and Pitfalls
Division 293 Tax: High earners should be aware of Division 293 tax. If your income plus concessional super contributions exceed $250,000, you'll pay an additional 15% tax on super contributions (bringing the total to 30%). However, even at 30%, this is still better than paying 47% on personal income.
Timing Matters: Contributions must be received by your super fund by June 30 to count for the current financial year. Don't leave it until the last minute—banks and super funds can take 2-3 business days to process transfers.
Total Super Balance: Your total superannuation balance is measured on June 30 each year. If it exceeds $500,000, you lose access to carry-forward contributions for the following year.
Communication With Your Employer: If you're using salary sacrifice, ensure your employer processes the contributions in time for them to reach your fund before June 30.
Before June 30 Action Steps:
Check your super balance: Confirm your total super balance on June 30 of the previous financial year was below $500,000
Calculate unused cap space: Contact the ATO or check your MyGov account to see your unused concessional cap amounts from previous years
Review year-to-date contributions: Check how much has already been contributed this financial year through employer contributions
Make additional contributions: Arrange salary sacrifice or personal deductible contributions to maximise your available cap space
Confirm timing: Ensure contributions will be received by your fund before June 30
Disclaimer: This article provides general information only and does not constitute personal financial advice. Superannuation strategies should be implemented with professional advice considering your individual circumstances, including consultation with a licensed financial advisor and tax professional. The information in this article is current as of the publication date but superannuation rules and contribution caps may change.