A simple way to improve your position before the end of the financial year
As we get closer to 30 June, many people assume they’ve missed the opportunity to improve their financial position for the year.
In reality, there is often still time.
Making concessional contributions before 30 June can be one of the simplest ways to reduce tax and boost your super before the end of the financial year.
What are concessional contributions?
Concessional contributions are contributions made into super from pre-tax income.
They generally include:
- employer super contributions
- salary sacrifice contributions
- personal contributions that are claimed as a tax deduction
Because these contributions are taxed at 15% inside super, they are often more tax-effective than receiving income personally.
Why this matters
If you’re earning income, you’re likely paying tax at your marginal rate.
For many people, that rate is higher than 15%.
So by making concessional contributions before 30 June, you may be able to:
- Reduce your taxable income
- lower the amount of tax you pay
- Increase your super balance
This is one of the more straightforward ways to improve your position within the current financial year.
A simple example
Let’s say someone earns $120,000 per year.
If they contribute an additional $10,000 into super as a concessional contribution:
- That $10,000 is taxed at 15% in super
- instead of being taxed at their marginal tax rate
The result:
- Less tax paid overall
- more money retained within super
While the exact benefit will vary, the difference can be meaningful over time.
Salary sacrifice vs personal contributions
There are two common ways to make concessional contributions before 30 June:
Salary sacrifice
- contributions are made directly from your pre-tax salary
- reduces your taxable income automatically
Personal deductible contributions
- You contribute funds to your super yourself
- Then claim a tax deduction at tax time
This approach can be useful if:
- You have surplus cash available
- You want flexibility over the timing
Why timing is important
To count for this financial year:
- contributions must be received by your super fund before 30 June
Because of processing times:
- Leaving this too late can mean missing the opportunity
So planning is important.
Where this fits into a broader strategy
Maximising concessional contributions often works alongside other strategies.
For example:
- using carry-forward concessional contributions from previous years
- aligning with tax planning
- building super in the lead-up to retirement
It also forms part of broader retirement planning advice and long-term superannuation advice.
Things to be aware of
There are limits on how much you can contribute.
For most people, the concessional contribution cap is:
- $30,000 per year
Exceeding this cap can lead to additional tax.
So it’s important to understand:
- How much has already been contributed
- What capacity remains
The ATO provides further detail on concessional contributions here:
Concessional contributions cap
The takeaway
Many people assume it’s too late to make a difference before 30 June.
However, even small contributions can:
- reduce tax
- increase super
- and improve your overall position
Making concessional contributions before 30 June is one of the simplest ways to take action before the end of the financial year.
Next steps
If this has raised a few questions, that’s usually a good sign.
This isn’t just about contributing; it’s about understanding how much you can contribute and how it fits into your broader strategy.
If you’d like to see how this could apply to your situation, we can map it out properly and run through the numbers.
As always, this is general information only and does not take into account your personal circumstances.