What Are Superannuation Non-Concessional Contributions & How To Make the Most of Them?

Non-concessional contributions – the less attractive of the contribution siblings. In a world of immediate gratification, we don’t appreciate the underlying beauty of non-concessional contributions. But, like many of those ‘average-looking’ girls you went to high school with (or maybe you were one), non-concessional contributions don’t take long to hit their prime, flourishing into beautiful specimens and staying there for many years to come.

What is a Non-Concessional Contribution?

A non-concessional contribution is a contribution made to superannuation where a tax deduction has not been claimed in respect of that contribution.

The long-term benefit of non-concessional super contributions is that you are investing your wealth in the tax-effective superannuation environment and reaping the rewards of investment returns on the compounded tax savings.

Who Can Make Non-Concessional Contributions?

Your eligibility to make non-concessional superannuation contributions is based on your age, employment status and superannuation balance.

Non-Concessional Contributions Under Age 67

If you are under age 67 you are able to make non-concessional contributions to superannuation, provided your total superannuation balance is less than $1.7 million.

Non-Concessional Contributions Age 67 – 74

If you are aged between 67 and 74 you are able to make non-concessional contributions to superannuation, provided you meet the superannuation work test and your total superannuation balance is less than $1.7 million.

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The superannuation work test requires you to work at least 40 hours over a 30-consecutive day period in the financial year the contribution is made and prior to the contribution being made.

Related article:  Non-Concessional Contributions Over 65

Non-Concessional Contribution Cap

There is a limit on how much you can contribute to super as a non-concessional contribution. This is known as the non-concessional contribution cap.

The non-concessional contribution cap is $110,000 per person, per financial year. However, you may be able to contribute more than this in a single financial year by using the bring-forward rule.

If your total superannuation balance exceeds $1.7 million, your non-concessional contribution cap is nil. 

Related article:  Average Super Balance at Retirement

Non-Concessional Bring Forward Rule

If you are under age 67, or were under age 67 at the beginning of the financial year, you are able to utilise the bring-forward rule.

The bring-forward rule allows you to bring-forward up to two additional years’ worth of the non-concessional contribution cap and contribute $330,000 at any point over a three-year period with no regard to the annual $110,000 cap.

The amount of the cap you are able to bring-forward is based on your total superannuation balance, as follows:

Super Balance on 30 June of Previous Financial Year Financial Year Total Cap Including Bring-Forward Amount (Years Brought Forward)
Below $1.48M $330,000 (2 Years)
$1.48M to $1.59M $220,000 (1 Year)
$1.59M to $1.7M $110,000 (No bring-forward period)
$1.7M + $0 (n/a)

The bring-forward rule is only triggered in the financial year that your non-concessional contributions exceed $110,000. However, if you do not utilise the full cap in the initial year, you may be unable to make non-concessional contributions in future years if your balance exceeds $1.7M.

Advantages of Non-Concessional Contributions

The advantage of making non-concessional contributions is that you are investing the contributed amount into a concessionally-taxed environment.

All investment earnings within a superannuation accumulation account are taxed at a maximum of 15%. This can often be a lower tax rate than if you were to invest in your personal name and have earnings taxed at your marginal tax rate.

Then, if you use your superannuation accumulation account to start an account based pension, all investment earnings are received tax-free.

A non-concessional contribution will always enter your super fund without incurring contributions tax and can always be withdrawn from super tax-free, including reducing potential death benefits tax, by increasing the tax-free component.

Also, a non-concessional contribution can make you eligible to receive the super co-contribution and provide your partner with a spouse tax offset via a spouse contribution.

Another little known benefit of super is that your super balance is generally protected from creditors. So, if you find yourself being sued or facing bankruptcy, your super balance cannot be touched.

Disadvantages of Non-Concessional Contributions

The downside of non-concessional contributions is, unlike its sexy sibling – the concessional contribution, you are unable to claim a personal tax deduction for making non-concessional contributions.

Another thing to keep in mind, as with any contributions, is that, once contributed, you are unable to access this amount until you have met a superannuation condition of release definition, such as retirement or attaining age 65.

Further, any amount contributed will usually be invested and therefore exposed to capital fluctuations and market volatility.

Related article: Superannuation advice

Excess Non-Concessional Contributions

Should you exceed the non-concessional contributions cap, the ATO will give you two options:

  1. Withdraw the excess non-concessional contributions, plus 85% of the associated investment earnings. No additional tax will be levied on the non-concessional contributions, but the earnings will be taxed at your marginal tax rate, minus a 15% tax offset; OR
  2. Leave the excess non-concessional contributions within super, where the excess will be taxed at 47%. This can effectively result in the contribution amount being taxed at up to 94% due to the contributions already having been taxed at your marginal tax rate prior to initially being contributed.

Other Types of Non-Concessional Contributions

There are some other types of contributions that do not count towards the non-concessional contribution cap, but are still treated like non-concessional contributions. These include the Home Downsizer contribution and the CGT Small Business Retirement Exemption contribution.

Home Downsizer Contribution

The Home Downsizer contribution is available to individuals over age 65 who have recently sold their home. You can contribute up to $300,000 of your home sale proceeds into superannuation, regardless of how large your superannuation balance is.

If you have a partner, you can each contribute $300,000 of the proceeds under the home-downsizer rules.

A Home Downsizer contribution does not count towards the non-concessional contribution cap, but will count towards the tax-free component within your super balance.

Certain conditions relating to the Home Downsizer Rules apply.

Related article: Downsizer super contribution 

CGT Small Business Retirement Exemption

Under the CGT Small Business Retirement Exemption, a CGT exemption of up to a lifetime limit of $500,00 is available if you sell a business and wish to disregard all or part of a capital gain.

A Home Downsizer contribution does not count towards the non-concessional contribution cap, but will count towards the tax-free component within your super balance.

Should I Make a Non-Concessional Contribution?

If you have surplus savings or income, it is often better to make concessional contributions to super before making any non-concessional contributions, assuming you have a personal taxable income above the tax-free threshold. This is because concessional contributions can provide immediate benefits in reducing your personal income tax. Just be mindful of the concessional contribution cap and discuss the amount you should contribute with your accountant first.

If you do not have a taxable income or have made the most of your superannuation concessional contributions, then non-concessional contributions can be a great way of building wealth towards retirement. Just be sure you will not require any of the funds contributed between now and retirement.

Hi, I hope you enjoyed reading this article.

If you want my team and I to help with your retirement planning, click here.

If you prefer a DIY approach, then check out the SuperGuy HUB.

Thanks for stopping by - Chris


  1. Ray

    Hi Chris, Great web site. Interesting that you have no questions on this Blog so here is one!. I turned 66 this year and my wife turns 65 later this year. We are both retired although I do some part time work that has met the “work test” and earned about $10k this FY from this source. We have less than $1.3m super combined. We have over $800k in assets so are not eligible for Govt pension. We have an investment property that has about $200k equity. So! Do we sell now, take CGT hit and put proceeds into Super – $100k myself and $100k partner or wait a few years gambling on property value increase leveraging gearing on the property? Assuming no rule changes (probably not a good assumption given govt has to recoup mega $ COVID spending) it would seem that if we waited until we are both over age 67 then non-concessional contributions would be capped at $100k each so any excess (assuming happy days property values!) would need to invested elsewhere?

    • Chris Strano

      Hi Ray, thank you for your comment.
      There is no right or wrong answer to the question you pose – just pros and cons of each. The main benefit of contributing to super is that tax on all investment earnings is capped at 15%, reducing to 0% if you use your super to commence an income stream. This compares with investment earnings being taxed at your marginal tax rate for assets held outside super. As you say, holding an investment property relies on future growth and rental yield, neither of which can be guaranteed. However, the same rings true for any type of investment. But, could less risk be achieved by having a more diversified portfolio and not be so reliant on one single asset (e.g. an investment property)? There may even be ways to reduce the CGT impact of selling a property. Ultimately, a retirement strategy should be designed to have the highest probability of meeting your retirement objectives at the lowest risk possible – giving greater certainty and comfort that you will be able to fund your retirement years. To obtain a more concise and less general response to your question, you may consider seeking personal retirement advice. If you do not have a financial planner, feel free to check out our financial planning practice, Toro Wealth, and arrange a complimentary 15-minute appointment here to see if personal advice would be beneficial for you.
      All the best,

  2. Michael Whitbread

    Thank you Chris

    I have been trying to get this information from the ATO and my super fund. All I am getting, however, is either computer generated jibberish from the former or to be herded towards a financial advisor who bares a striking resemblance to a white pointer by the later.

    Well done!

    • Chris Strano

      Hi Michael,
      Haha! Thank you for taking the time to comment. With right tools, knowledge and education, it is possible to manage your own superannuation and retirement plan.
      I’m glad you found the information useful and coherent.


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