What Are Non-Concessional Contributions
Posted on:
Raffi Pailagian
MBA, BSc, DipFP
Financial Planner / Managing Partner
What Are Non-Concessional Contributions & How Can They Maximise Your Super
Quick Summary
Non-concessional contributions are one of the most effective ways to grow your super faster, particularly for Australians with available capital or nearing retirement. In this article, we’ll unpack exactly what non-concessional contributions are, how the contribution caps work, who can benefit, and strategies to maximise your super the smart way.
Table Of Contents
- What Are Non-Concessional Contributions?
- Why Make Non-Concessional Contributions?
- Non-Concessional Contribution Caps (2025–26)
- The Bring-Forward Rule Explained
- Who Can Make Non-Concessional Contributions?
- How To Make A Non-Concessional Contribution
- Case Study: How Non-Concessional Contributions Can Boost Retirement Savings
- Common Mistakes To Avoid
- Strategic Ways To Maximise Your Non-Concessional Contributions
- The Power Of Compound Growth In Super
- When Non-Concessional Contributions Might Not Suit You
- Recent Statistics On Super Contributions & Balances
- Professional Guidance Matters
- Final Thoughts
- Frequently Asked Questions (FAQ)
Unlike concessional (before-tax) contributions, non-concessional contributions are made from your after-tax income, meaning they’re not taxed on entry into your super fund. For individuals with the financial capacity to contribute more, these can significantly accelerate retirement wealth, all within the tax-advantaged superannuation environment.
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What Are Non-Concessional Contributions?
Non-concessional contributions (NCCs) are voluntary contributions made to your super fund using after-tax money. Because tax has already been paid on this income, the super fund does not apply the usual 15% contributions tax that applies to concessional (before-tax) contributions such as employer Super Guarantee or salary-sacrifice payments.
In simple terms:
You’ve already paid income tax on this money, so when you contribute it to super, it goes in tax-free and grows within the super environment.
This makes NCCs an appealing option for Australians looking to boost their super balance, particularly in years where they’ve received windfalls such as:
- Sale of an investment property
- Inheritance or financial gift
- Business proceeds
- Redundancy or bonus payment
Why Make Non-Concessional Contributions?
There are several benefits to making NCCs, especially for Australians who have already reached their concessional contribution limits.
Tax-Free Growth Environment
Once in super, your investment earnings are taxed at a maximum of 15%, and in pension phase, they may even be tax-free. Over the long term, this can significantly outperform investing the same funds outside super where earnings are taxed at your marginal rate.
Flexibility To Contribute Larger Amounts
Non-concessional caps are generous. You can contribute up to $120,000 per financial year (2025–26 cap) or use the “bring-forward rule” to contribute up to $360,000 in one year by accessing three years’ worth of caps at once (subject to eligibility).
No Contributions Tax
Since these contributions come from after-tax income, the 15% entry tax that applies to concessional contributions does not apply. Every dollar you put in works harder for your future.
Estate Planning Advantages
Money inside super can be tax-advantaged when left to tax-dependent beneficiaries, such as a spouse or minor children. This can make NCCs an efficient tool for transferring wealth within families.
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Non-Concessional Contribution Caps (2025–26)
The Australian Taxation Office (ATO) sets annual contribution caps to limit how much can be contributed to super on a concessional and non-concessional basis.
| Contribution Type | Annual Cap 2025–26 | Tax Treatment | Eligibility |
| Non-Concessional | $120,000 | Tax-free (made from after-tax income) | Available if total super balance < $2 million |
| Bring-Forward Rule | Up to $360,000 | Tax-free | Triggered automatically when contributing more than $120,000 in one year |
Source: ATO – Non-concessional Contributions Cap (May 2025)
If your total super balance exceeds $2 million, you are not eligible to make further NCCs. Any contributions above the cap may be subject to penalty tax and must be withdrawn.
The Bring-Forward Rule Explained
The bring-forward rule allows you to bring forward up to three years’ worth of NCC caps, giving you the flexibility to make a large one-off contribution.
For example:
- You can contribute up to $360,000 in one financial year (based on the 2025–26 cap of $120,000 × 3).
- Once triggered, you cannot make further NCCs until the three-year period has passed.
This strategy is particularly useful if you’ve recently sold an asset, received an inheritance, or have funds you’d like to transfer into super in a tax-efficient way.
Bring-Forward Rule Thresholds (from 1 July 2024)
| Total Super Balance at 30 June | Bring-Forward Cap Available |
| Less than $1.68 million | $360,000 (3 years) |
| $1.68 million – $1.79 million | $240,000 (2 years) |
| $1.79 million – $1.9 million | $120,000 (1 year) |
| $1.9 million or more | Ineligible |
Source: Australian Taxation Office – Bring-forward arrangements (May 2025)
Who Can Make Non-Concessional Contributions?
To make non-concessional Contributions (NCCs), you must:
- Be under age 75, and
- Have a total super balance under $2 million on 30th June 2025, as over this you will need to pay additional tax on your total super balance.
If you are aged 67–74, you can contribute without meeting the work test, provided it is a personal contribution (the work test now only applies to concessional contributions).
How To Make A Non-Concessional Contribution
Step 1 – Confirm Your Eligibility
Check your total super balance through your myGov account or by contacting your super fund. Ensure you are under the $1.9 million threshold.
Step 2 – Check How Much You Can Contribute
If you haven’t used the bring-forward rule in the past three years, confirm whether you can use it now. Your super fund or financial planner can assist in confirming this.
Step 3 – Transfer Funds
You can transfer money from your bank account to your super fund, usually via BPAY or direct deposit, marking it as a personal (after-tax) contribution.
Step 4 – Notify Your Super Fund
You don’t need to claim a tax deduction for non-concessional contributions, but you must notify your fund that the contribution is non-concessional so it’s treated correctly.
Ready To Discuss Your Requirements?
Our Team Look Forward To Hearing From You!
Case Study: How Non-Concessional Contributions Can Boost Retirement Savings
Let’s look at an example:
Emma, age 55, has built a super balance of $850,000. She recently received $300,000 from selling an investment property and wants to maximise her retirement savings.
- Because her total super balance is below $1.68 million, Emma is eligible for the three-year bring-forward rule.
- She contributes $300,000 to her super fund as a non-concessional contribution.
This means:
- No 15% contributions tax applies.
- All earnings on this amount are taxed at just 15% inside super (and potentially tax-free when converted to an income stream in retirement).
- Assuming a 5% average annual return, that $300,000 could grow to over $511,000 in 10 years, tax-advantaged.
Common Mistakes To Avoid
Exceeding The Cap
If you exceed your NCC cap, the excess amount will be taxed at the top marginal rate (up to 47%), unless withdrawn. Always confirm available cap space before contributing.
Triggering The Bring-Forward Rule Unintentionally
If you contribute more than $120,000 in one year, the bring-forward rule is automatically triggered, even if you didn’t plan to. This may restrict your ability to contribute over the next two years.
Ignoring Your Total Super Balance
Once your balance exceeds $2 million, you’re no longer eligible to make NCCs. This includes balances across all your super accounts combined.
Forgetting Timing Around 30 June
If you want to use the current year’s cap, ensure contributions are received by your fund before 30 June, not just sent.
Not Considering Centrelink Impacts
Large non-concessional contributions can affect Centrelink asset tests and age pension eligibility later in life. Professional advice is essential before contributing significant amounts.
Strategic Ways To Maximise Your Non-Concessional Contributions
Use The Bring-Forward Rule Before Retirement
If you’re in your 50s or early 60s, this can be a final opportunity to maximise super before retirement. With caps linked to the general transfer balance cap, thresholds often increase over time, making it worth monitoring ATO updates.
Combine With Spouse Contributions
If your spouse’s balance is lower, consider contributing to their super. This can help even out retirement savings and potentially reduce future tax liabilities.
Plan Around Asset Sales or Windfalls
Directing proceeds from property, shares, or business sales into super via NCCs can lock in tax-advantaged long-term growth rather than leaving funds exposed to higher personal tax rates.
Maximise Prior to Reaching $2 Million
Once you cross this threshold, you lose eligibility for NCCs. A strategic contribution before hitting the cap can help future-proof your retirement savings.
Combine With Downsizer Contributions
If you’ve sold your home after age 55, you may be eligible to contribute up to $300,000 per person via downsizer contributions, on top of your NCC limits. Combining both can be extremely effective for wealth transfer.
Source: ATO – Downsizer Contributions (March 2024)
Ready To Discuss Your Requirements?
Our Team Look Forward To Hearing From You!
The Power Of Compound Growth In Super
The real benefit of making non-concessional contributions isn’t just the tax savings, it’s the power of compound growth over time.
For example, contributing an extra $100,000 to super at age 50 (earning an average of 6% p.a.) could grow to:
- $179,000 by age 60
- $321,000 by age 70
That’s an additional $221,000 in retirement wealth, simply by investing in a tax-advantaged vehicle.
When Non-Concessional Contributions Might Not Suit You
While NCCs are a powerful strategy, they’re not right for everyone. You should seek financial advice before contributing if:
- You may need the funds before retirement age
- You’re close to the $2 million total super balance cap
- You expect to qualify for the Age Pension (contributions may impact eligibility)
- You’re considering investing outside super where liquidity is important
At Manly Financial Services, we help clients assess whether contributing to super, or retaining flexibility outside it, provides the best balance of tax efficiency, access, and lifestyle goals.
Recent Statistics On Super Contributions & Balances
- As of June 2024, Australians held over $3.9 trillion in superannuation assets, making it one of the largest retirement systems globally. (APRA Superannuation Statistics, June 2024)
- The average super balance at retirement (age 60–64) is now around $401,600 for men and $300,300 for women. (Deloitte 30 June 2024 reported by Australian Super)
- Only 1 in 4 Australians are currently believed to be maximising their annual super contribution caps
- The number of individuals making non-concessional contributions rose by 8.2% in 2024, driven by property downsizing and inheritance-related transfers. (APRA 2024)
These figures underline a growing awareness among Australians that super is one of the most tax-effective investment structures available.
Professional Guidance Matters
Navigating super contribution caps and bring-forward rules can be complex, especially if you have multiple funds, an SMSF, or are planning large contributions.
A qualified financial planner can help you:
- Determine your available contribution cap space
- Strategically time contributions to minimise tax
- Ensure compliance with ATO thresholds and reporting
- Align your contributions with your retirement and estate planning goals
At Manly Financial Services, our team specialises in personalised superannuation strategies, helping clients grow wealth tax-effectively while maintaining flexibility and control over their retirement journey.
Final Thoughts
By understanding the caps, eligibility rules, and strategic timing, you can unlock significant long-term benefits within a tax-efficient environment that’s difficult to replicate outside super. However, the best outcomes come from tailored strategies that consider your total financial position, tax circumstances, and lifestyle goals. If you’re considering making a lump sum contribution or want to explore the bring-forward strategy, we recommend speaking with an experienced financial planner before you act.
Frequently Asked Questions (FAQ)
A: Concessional contributions are made to your super before tax (such as employer Super Guarantee or salary-sacrifice amounts) and are taxed at 15% on entry to your fund. Non-concessional contributions, are made after tax, using money that has already been taxed at your marginal rate, so they aren’t taxed again when entering your super account.
A: The annual non-concessional contribution cap for the 2025–26 financial year is $120,000. If eligible, you can also use the bring-forward rule to contribute up to $360,000 in one financial year by bringing forward three years of contributions.
A: If you exceed your cap, the excess amount may be taxed at the top marginal tax rate (47%), unless you choose to withdraw it. You’ll also need to pay associated earnings tax on any returns generated by the excess amount while it remains in your super fund.
A: Generally, no. Non-concessional contributions can only be made up to age 75, and must be received by your fund within 28 days of the month you turn 75. After that age, you may still be able to make a downsizer contribution if eligible, which is not counted toward your NCC cap.
A: Yes. Many Australians use a combined strategy, contributing both before-tax and after-tax amounts, to maximise their super growth and take advantage of available tax concessions. A financial planner can help you structure both types of contributions to stay under the ATO’s limits and optimise your tax outcomes.
A: No. Once money enters your super, it’s preserved until you meet a condition of release, such as reaching your preservation age and retiring. Super is designed for long-term savings, so you generally can’t access it early unless under special circumstances (e.g. severe hardship or compassionate grounds).
A: Yes. Because non-concessional contributions are made from after-tax money, withdrawals of these amounts are tax-free. Any associated investment earnings may also be tax-free in pension phase once you’ve retired and started an income stream.
A: No. Only concessional (before-tax) contributions can be split between spouses.
However, you can make a direct non-concessional contribution into your spouse’s account to help equalise retirement savings and potentially improve tax outcomes.
A: No. The Division 293 tax (an extra 15% tax on concessional contributions for high-income earners) applies only to before-tax contributions, not NCCs. That’s why non-concessional contributions can be an attractive option for high-income earners who have already maximised their concessional caps.
Important Disclaimer: The information provided in this article is general in nature and does not constitute financial advice. Please consult with a qualified financial advisor to discuss your individual circumstances before making any decisions.
References:
- Australian Taxation Office – Non-concessional Contributions Cap
- Australian Bureau of Statistics (Gender Indicators, Australia 2024)
- Australian Taxation Office – Bring-Forward Arrangements
- Australian Taxation Office – Downsizer Contributions
- APRA – Quarterly Superannuation Performance Statistics, June 2024
- Australian Super
- APRA Superannuation Statistics March 2024
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