Catch-Up Super Contributions: A Powerful Way to Boost Super and Reduce Tax

Catch-up contributions allow you to exceed the standard annual concessional cap ($30,000 pa) provided your total super balance was under $500,000 at the previous 30 June and you have unused cap amounts from the past five financial years.

This strategy is designed to help you grow your super faster and reduce your tax and is especially appealing if you are leading up to retirement and still working. It involves concessional (before-tax) contributions such as salary sacrifice and personal deductible contributions. It is not related to non-concessional (after-tax) contributions, which have a separate annual cap of $120,000.

Important: This strategy is worth considering if earning taxable income, and eligible to contribute to super.

There are a few key reasons why this strategy is so effective:

• Tax savings: Concessional contributions are taxed at just 15%, which is usually much lower than your marginal tax rate. If you are still working, or earning other forms of taxable income, this can be a smart way to reduce the tax paid on your income.
• Boost retirement savings: The more you can contribute to super before retiring, the more flexibility and financial security you will have in retirement.
• Time-limited opportunity: You can only carry forward unused concessional caps for up to five years, and the oldest amounts expire first. For example, any unused cap from 2020–21 will expire after 30 June 2026, so timing matters.

Let’s take an example:

Sarah is 63, still working, and earning $130,000 in 2025–26. Her super balance is $400,000 as of 30 June 2025, so she meets the eligibility criteria to use the catch-up rules. Over the past five years, she hasn’t made any salary sacrifice or deductible contributions, just her employer’s superannuation guarantee (SG) contributions.

Here’s a breakdown of her SG contributions and unused cap amounts:

Sarah could choose to salary sacrifice or make personal deductible contributions (using personal cash) of up to $72,930 in 2025–26.

If Sarah contributes the full $72,930, here’s how the numbers stack up:

• Marginal tax rate (for income between $45,001–$135,000 in 2026 FY): 30% + 2% Medicare = 32%
• Tax on super contributions: 15%

She saves:

$72,930 × (0.32 – 0.15) = $12,398.10 in tax savings

She also boosts her super by approximately:

$72,930 × 0.85 = $62,990.50 after contributions tax

That’s a $12,000+ tax saving and nearly $63,000 extra in her super.

What if Sarah only contributed an additional $20,000?

If Sarah chooses to salary sacrifice $20,000 in 2025–26, her employer would still contribute $14,950 in SG, bringing her total concessional contributions to $34,950. This exceeds the standard concessional cap of $30,000 by $4,950, which can be covered using her available catch-up cap.

Sarah would still benefit from tax savings and a boost to her super, while preserving most of her unused cap for future years.

Sarah may decide to contribute more in future years but she should be aware that any unused concessional cap from 2020–21 will expire after 30 June 2026. In this case, she would lose the remaining $9,077.18 from that year if she doesn’t use it by then.

If you or someone you know is still working and has a super balance under $500,000, this is a smart and often overlooked strategy worth exploring. Whether it’s you, a partner, sibling, or colleague nearing retirement and wanting to boost their super, now could be the ideal time to contribute more, reduce tax, and get ahead financially for retirement.

We can help you review your history and develop a smart, personalised strategy.