If you’re a high-income earner or a business owner, this tax saving opportunity may be flying under your radar and time is running out.

The 2019–2020 unused concessional superannuation cap is set to expire on 30 June 2025. If you’re eligible and haven’t used your full cap for that year, this is your last chance to top up your super tax effectively and potentially save thousands in tax.

What Is the Concessional Carry Forward Rule?

Since 1 July 2018, the Australian Tax Office has allowed individuals with a total super balance under $500,000 as at 30 June of the previous financial year to carry forward unused concessional contributions for up to five years.

• The annual concessional cap is $25,000 for 2019–2020.
• If you didn’t use all of it then, you can “catch up” now but only until 30 June 2025.
• After that, the unused portion from that year expires permanently.

Why It Matters

High income individuals and successful business owners often face significant tax liabilities. Strategically contributing to super using the carry forward rule could allow you to:

• Offset taxable income in a high-income year
• Boost your retirement savings
• Take advantage of the 15% concessional tax rate within super (compared to your marginal rate)

Contributing an additional $25,000 (if total concessional superannuation cap was unused from 2019–2020) could reduce your taxable income significantly. All while building long-term wealth in a tax-effective structure.

Who Should Act Now?

• Earning a high income or business profit in FY2024–2025
• Have a total super balance under $500,000 as at 30 June 2024
• Haven’t maxed out your concessional contributions in past years
• Looking to reduce your tax bill before EOFY
• Made a large capital gain in FY2024-2025

If this sounds like you, the window is closing fast.

Speak to a Specialist

As with any financial strategy, timing and accuracy are everything. We strongly recommend speaking with a qualified accountant or financial adviser who understands your goals and can guide you through the process before the deadline.

Get in touch with SKD Accountants today and let’s explore how this opportunity can fit into your overall tax strategy.