What Is Concessional Contribution?
Super contributions made from pre-tax income, taxed at 15% inside the fund. The annual cap for 2025/26 is $30,000 (combined employer plus personal deductible).
Definition
Concessional contributions (CCs) are super contributions made from pre-tax income. They include employer Superannuation Guarantee contributions, salary sacrifice contributions, and personal contributions claimed as a tax deduction. CCs are taxed at 15% inside the fund, which is lower than most workers' marginal tax rate. The annual concessional cap for 2025/26 is $30,000. Contributions above this cap are included in your assessable income and taxed at your marginal rate, with a 15% tax offset. The unused concessional cap can be carried forward for up to 5 years if your total super balance is below $500,000. High-income earners (income over $250,000) pay an additional 15% tax (Division 293 tax) on concessional contributions.
Example
An employee earning $100,000 makes $15,000 of salary sacrifice contributions plus receives $12,000 in employer SG (12%). Total CCs = $27,000, within the $30,000 cap. Tax saving = ($100,000 x 37% - $15,000 x 15%) vs paying marginal rate on all income.