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Julia Hartman
June 10, 2026 — 5:01am
As the end of the financial year approaches, it may be worth considering making an extra lump-sum contribution into your superannuation fund and claiming a tax deduction.
If your superannuation balance was under $500,000 as at June 30, 2025, and you have not contributed the maximum concessional (tax-deductible) amount in the previous five years, then you may be entitled to use some of those previous unused caps to take your concessional contributions over $30,000 this year. Concessional contributions are taxed at just 15 per cent, far lower than most people’s marginal tax rates.
Careful planning is necessary to make the most of this concession, as it is certainly not one-size-fits-all. You also need to consider your position in future years as they will be affected.
To use up an unused cap from a previous year you must first use up your full $30,000 for this year. Once you have gone over the $30,000 for this year, any excess reduces the unused cap for the 2020-2021 year, then the 2021-2022 year, etc. Using up the 2020-2021 cap is important because next year it will no longer be available.
If you are already around the $30,000 mark, for this year, there is nothing to lose by soaking up that 2020-2021 unused balance. If you are nowhere near the $30,000 mark this year, your decision needs to consider future years, as using up this year’s cap makes less available in the future.
This also needs to be balanced with making sure you fully utilise your unused caps before your balance exceeds $500,000 and preferably before your adjusted income is over $250,000. If your adjusted income exceeds $250,000, your superannuation contributions will be taxed at 30 per cent instead of 15 per cent.
There is a sweet spot where a superannuation contribution is going to save you 32 per cent in tax.
Though if you only exceed the $250,000 by an amount that is less than your superannuation contributions, you will only be subject to the 30 per cent tax on the excess. Notice that the $250,000 is adjusted income not taxable income.
The adjustments among other things will add back any passive investment losses, reportable fringe benefits and any concessional superannuation contributions made by your or your employer.
There is a sweet spot where your taxable income is over $190,000, so your tax rate is 47 per cent, but your adjusted income is under $250,000. This is where a superannuation contribution is going to save you 32 per cent in tax.
So, you can see it may be better to use up all your unused cap before you make that huge capital gain that will push you over the $250,000. Either way your income will be taxed at 47 per cent, you may as well plan to make the most of those unused contributions by using them to bring your taxable income down to $190,000, but while keeping your adjusted income under $250,000, whenever that is possible.
That way the extra contributions for the unused cap go into superannuation at the 15 per cent tax rate. But if time is running out, 30 per cent is still better than 47 per cent.
If you have met a condition of release, then you are still entitled to make concessional (tax-deductible) contributions into superannuation. You could withdraw enough funds to bring you under the $500,000 threshold this year, then you could make a superannuation contribution next year.
Retirees are likely to have huge unused caps. But once they each 67 years of age, they need to meet a work test to be able to claim a tax deduction for superannuation contributions.
You can find your unused cap balances on MyGov. You will have to submit a “notice of intent” form via your super fund to claim the tax deduction.
Julia Hartman founded BAN TACS Accountants more than 30 years ago and is still passionate about all things tax.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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