Carry-Forward Contributions: The Super Tax Savings Strategy for Everyone

If you've had years where you couldn't make the maximum concessional super contribution — perhaps due to lower income, career breaks, or simply not prioritising super — the carry-forward rules give you a chance to make up for lost time and save significant tax in the process.

What Are Carry-Forward Concessional Contributions?

Since 1 July 2019, individuals have been able to carry forward unused concessional contribution cap space for up to five years. This means if you contributed less than the annual cap in previous years, you can "carry forward" that unused amount and use it in a later year to make a larger tax-deductible contribution to super.

Concessional contributions include employer Superannuation Guarantee (SG) contributions, salary sacrifice amounts, and personal contributions for which you claim a tax deduction.

How the Maths Works

The current concessional contribution cap is $30,000 per year (from 2024–25). If over the past five years you've had years where you only received employer SG contributions and didn't salary sacrifice or make personal contributions, you may have built up significant unused cap space.

For example, if your employer contributed $10,000 per year for the past five years (totalling $50,000), and the cap was $27,500–$30,000 per year over that period, you may have over $80,000 in unused cap space available to use this year. That's $80,000 you could contribute to super and claim as a tax deduction — potentially saving you tens of thousands in income tax.

The Eligibility Requirement: Total Super Balance

There's one important restriction: to access your carry-forward unused cap, your Total Super Balance (TSB) must be below $500,000 on the 30 June of the previous financial year. This rule is designed to target the concession at those who genuinely have lower balances and need to catch up.

If your TSB is at or above $500,000, you can still make standard concessional contributions up to the annual cap, but you cannot access any carry-forward amounts.

How to Check Your Available Carry-Forward Amount

The easiest way to check your available carry-forward balance is through myGov. Under the ATO section, navigate to "Super" then "Manage" and you'll find a summary of your unused concessional contributions cap amounts from prior years.

Your accountant can also assist with calculating the optimal amount to contribute in a given year, taking into account your income, projected tax liability, and TSB.

Ideal Situations for Carry-Forward Contributions

This strategy is particularly powerful in the following scenarios:

• You've had a high-income year (e.g., bonus, asset sale, business windfall) and want to reduce your taxable income
• You took time off work to raise children or care for family members and want to rebuild super
• You are approaching retirement and want to maximise super balances in the final years of working
• You recently sold a property or investment and want to shelter some proceeds from tax

Personal Deductible Contributions: The Mechanism

To claim a carry-forward contribution as a tax deduction, you must make a personal contribution to your super fund and then submit a Notice of Intent to Claim a Deduction to your super fund before lodging your tax return (or before rolling over/withdrawing the funds). This form is essential — without it, the contribution will be treated as non-concessional.

Get Advice Before You Contribute

While carry-forward contributions can be a powerful tax strategy, it's important to model the numbers carefully before making a large lump-sum contribution. Super is generally not accessible until you reach your preservation age (currently between 57 and 60 depending on birth year), so make sure you're comfortable with the liquidity implications.

The team at Elite Accounting Solutions can review your super position and help you determine whether a carry-forward contribution strategy is right for you. Get in touch today.