As a financial adviser, I’m often asked about superannuation, especially as people get closer to retirement, so I thought I’d share a quick rundown of super and the rules that apply.
At the time of writing, most eligible employees receive compulsory super equal to 12% of their earnings from their employer. (12% is the minimum and some employers will offer more.) The introduction of Payday Super – operating since 1 July 2026 – means that employers now calculate super each payday (instead of monthly or quarterly) and generally must arrange for it to reach their employee’s fund within seven business days.
Topping it up
Super remains a tax-effective way for Australians to save for their retirement. To encourage people to add to their super, Australians are able to make voluntary additional contributions to their super before they retire. These can be in the form of concessional and/or non-concessional contributions.
Concessional contributions are payments made into your super account that generally come from before tax income. They include combined payments made by your employer, salary sacrifice and deductible personal contributions. They’re called ‘concessional’ because they receive favourable tax treatment – your super fund will generally deduct only 15% contributions tax, rather than your usual marginal tax rate.
For 2026–27, the general cap for concessional contributions is $32,500.
Non-concessional contributions are paid from after-tax income and generally aren’t taxed again when they’re added to your super.
The general after-tax cap is $130,000.[1]
Concessional contributions are generally considered better for reducing tax (i.e. for those on high incomes), while non-concessional contributions may suit you if you’ve already paid tax or reached the concessional limit.
Accessing Your Super
Your super is usually preserved on your behalf for your retirement until you meet a condition of release – that’s commonly when you reach the preservation age and retire, start a transition-to-retirement pension, or turn 65. Preservation age is 60 for anyone born after 30 June 1964, and withdrawals from a taxed fund are generally tax-free from age 60, although exceptions apply.
I wrote about accessing super and conditions of release in an earlier blog post, which you can read here: https://alignfinancial.com.au/2025/02/12/navigating-retirement-faqs-about-super/
Getting close to $2m in super?
There are limits on the making personal after tax contributions once your super balance is close to $2m, so be sure to get advice and check your balance twice before putting more money into super.
Contributing to super sounds straight forward but it can be prudent to check you’re eligible before setting money aside for your retirement. For expert financial advice – call me at Align Financial on (02) 9913 9995.
[1] There are bring-forward and carry-forward rules which may let eligible people contribute more, but, generally, if you exceed the contributions cap, it can mean extra tax.
