A voluntary contribution is money that you add to your super from your after-tax income or other money that you can invest.
Making a voluntary contribution from your after-tax income to your super, can be an effective way to grow your retirement savings. These are also called non-concessional contributions and you can choose to make a one-off or regular contribution depending on your circumstances and financial commitments. As this type of voluntary contribution is made from your after-tax income or savings, it won’t attract any contribution tax in your super fund.
If you’re employed, self-employed or earn taxable income from other sources (such as investments), making a voluntary contribution for which you claim a tax deduction can be an effective way to not only grow your retirement savings but also reduce your taxable income. Once you claim a tax deduction on these type of contributions, they form part of your concessional contribution cap. It is generally taxed by your super fund at up to 15% (and up to 30% if your income is over $250,000 pa) instead of your marginal tax rate, which may be up to 47%. So, depending on your circumstances, making a voluntary deductible contribution may result in a tax saving of up to 32%.
You will need to submit a valid Notice of Intent form to your super fund. You’ll also need to receive an acknowledgment from the super fund before you complete your tax return, start a pension, withdraw or rollover money from the fund to which you made your voluntary contribution.
For more information, or to determine if you’re eligible, visit the ATO website or speak with your registered tax agent.
If you value the experience of experts in other aspects of your life, don't discount it when it comes to your financial wellbeing, including your super.
A financial adviser can help you identify ways to grow your super. So, start the conversation to see how a financial adviser can help you. If you don’t have one, give us a call and we can help you find one near you.
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The information on this web page is of a general nature only and has been prepared on behalf of the Trustee without taking into account your objectives, financial circumstances or needs. Before acting on any of this information, you should consider whether it is appropriate to your objectives, financial circumstances and needs, and seek appropriate professional advice. You should not rely on this information to determine your voluntary tax obligations, please consult a registered tax agent for this purpose.