2025 Tax Planning Opportunities with Super

As we approach the end of the 2025 financial year, it's essential to consider strategic tax planning opportunities. One of the most effective ways to reduce your taxable income while building long-term wealth is by making voluntary superannuation contributions. Whether you’re a salary earner, small business owner, or primary producer, these strategies can help you take full advantage of the superannuation system.

This document outlines the key tax benefits of making super contributions before 30 June 2025. Please note that this is general tax advice only. We recommend speaking with our licensed financial adviser before taking any action.

Why Super Contributions Make Tax Sense

Superannuation is taxed at a concessional rate of 15%, which is generally lower than personal marginal tax rates. This makes super contributions a tax-effective way to save for retirement while reducing current tax obligations.

Key Tax Benefits to Consider

1. Concessional (Before-Tax) Contributions – 15% Tax Rate

   These contributions include employer Super Guarantee (SG), salary sacrifice arrangements, and personal contributions claimed as tax deductions. The cap for the 2025 financial year is $30,000 per person. If your income exceeds $45,000, contributing to super can significantly reduce your tax rate from 32% or higher down to just 15%.

2. Catch-Up Contributions – Leverage Unused Concessional Caps

   If your total super balance is under $500,000, you can utilise unused concessional cap amounts from the previous five financial years (starting from 1 July 2018). This is ideal for those with fluctuating incomes, such as farmers or small business owners.

   
   

   Important: Any unused concessional cap amounts will expire after five years if not used. Planning ahead ensures you don’t miss out on this valuable opportunity.

Tip for Primary Producers:

If you operate via a trust or partnership and don’t receive SG contributions, deductible personal contributions can provide major tax savings. Use catch-up contributions in high-income years driven by favourable seasonal or market conditions to boost retirement savings and reduce tax liabilities without exceeding annual limits.

Low-Income Earners – Government Offsets

If your income is under $37,000, you may qualify for the Low-Income Superannuation Tax Offset (LISTO), which refunds up to $500 directly to your super account.

Additionally, if you earn up to $60,400, you may receive a Government Co-Contribution of up to $500 when making after-tax contributions.

High-Income Earners – Division 293 Tax

If your income (including super) exceeds $250,000, an extra 15% tax applies to your concessional contributions (totalling 30%). This is still lower than the top marginal tax rate of 47%. Only the portion of income above $250,000 is subject to this extra tax.

What Happens If You Exceed the Contribution Cap?

Contributions above the $30,000 cap are included in your personal tax return and taxed at your marginal rate, minus the 15% already paid by your super fund. You may be able to withdraw the excess amount to cover the additional tax.