Ever stared at your payslip and wondered if your super is doing enough work for you at tax time? You’re not alone. Most Australians know super is “tax-friendly” in some vague way, but couldn’t tell you exactly how much it’s actually saving them.
The good news is, super is one of the most powerful tax levers you’ve got. Used well, it can shave thousands off your tax bill each year, and tens of thousands across a working lifetime. Used poorly, you’ll leave that money sitting on the table for the ATO.
At RPS Accountants, we help individuals and small business owners across Epping and Melbourne’s north line up their super so it works hard now, and harder later. Let’s walk through what the smart moves actually look like in 2026.
How much tax can you really save with super?
Here’s the bit nobody spells out. Money inside super is generally taxed at 15%. Money outside super is taxed at your marginal rate, which for many Australians sits at 30%, 37%, or even 45%.
So if you earn $120,000 and salary sacrifices an extra $10,000 into super, you’ve shifted that $10,000 from a 37% tax bracket to a 15% one. That’s a tidy $2,200 saved in a single year, just from moving the money sideways.
Multiply that across ten or twenty years of working, and you’re looking at real money. We’ve seen clients save more in tax through smart super contributions than they spent on a family holiday each year.
The trick is knowing your cap, your bracket, and your timing. Get those three right, and super becomes one of the cheapest tax-saving tools available to you.
Could the new $3M super tax hit your balance?
This is the one most people haven’t caught up with yet. From 1 July 2025, there’s a new tax of 15% on earnings above the $3 million super balance threshold. That sits on top of the usual 15% earnings tax, so you’re looking at a total of 30%.
It’s called Division 296 tax. Sounds dry, but the impact is anything but. If your super balance creeps past $3 million, you’re now taxed on the growth above that line, including unrealised gains.
That last bit matters. You can owe tax on growth you haven’t actually banked. So if your share or property holdings inside super jump in value, you could be paying tax on paper profits.
Right now, this affects a small slice of Australians. But the threshold isn’t indexed, which means more people will be drawn in each year as balances grow.
If you’re sitting at $1.5 million or more, this is worth a conversation now, not later. There are strategies to manage it, but they take time to put in place.
Salary sacrifice or after-tax: which one wins?
Both can save you tax. They just work differently, and the smart choice depends on your bracket.
Salary sacrifice happens before tax. Your employer sends part of your wage straight into super, and it’s taxed at 15% inside the fund. That’s a clean win if your marginal rate is higher than 15%, which is most working Aussies.
After-tax contributions are made from money you’ve already paid income tax on. You can then claim a deduction on your tax return, which effectively converts it into a concessional contribution. Same tax outcome, different mechanics.
So which one wins? For most people, salary sacrifice is simpler because it happens automatically each pay cycle. For sole traders, freelancers, and anyone with an unpredictable income, the after-tax route gives you flexibility to choose your moment.
Just remember, both count towards your $30,000 concessional cap each year. Going over the cap means extra tax, which kind of defeats the purpose.
We can run the numbers either way and show you which option leaves more in your pocket.
Are you missing your carry-forward cap room?
This is one of the most underused tricks in Australian tax. If your total super balance was under $500,000 on 30 June last year, you can roll forward any unused concessional cap from the past five years.
That means if you’ve been contributing under $30,000 each year, you might have tens of thousands of unused cap sitting there, ready to use. Most people have no idea.
A common scenario. You sell an investment property and trigger a big capital gain. Without planning, that gain gets taxed at your marginal rate. With carry-forward, you can pile a chunky deductible contribution into super in the same year, slashing the tax hit.
We’ve seen clients save $20,000 or more in a single year using this strategy. It’s perfectly legal, ATO-approved, and sitting there for the taking.
You can check your carry-forward room in myGov under your ATO online services. Or just ask us. We’re happy to pull the numbers for you and map out the best year to use them.
Tax-smart super moves by life stage
What works at 25 isn’t what works at 55. Your super tax strategy should grow with you.
In your 20s and 30s, time is your superpower. Even small extra contributions compound massively. The Government co-contribution is also worth a look if your income is on the lower side, because the ATO will literally chip in up to $500 for you.
In your 40s, you’re often juggling a mortgage, kids, and a career peak. This is when salary sacrifice usually starts paying serious dividends, because your tax bracket has climbed but your super balance hasn’t quite caught up.
In your 50s, you’re sprinting for the finish line. Carry-forward contributions, spouse contributions, and contribution splitting all become powerful tools. This is the decade where smart planning can add hundreds of thousands to your retirement nest egg.
In your 60s, you’re shifting from accumulation to drawdown. Downsizer contributions, transition to retirement strategies, and pension phase planning all come into focus. Done well, you can move into a tax-free retirement income with very little stress.
Each stage has its own playbook. We help our clients build the right one for where they are right now.
Can you cut tax when passing super to kids?
Most people don’t realise their adult kids could lose up to 17% of their super inheritance to tax. That’s right. Death duties are technically gone, but a sneaky tax still hits the taxable component of super left to non-dependent adult children.
Here’s the trap. If your super has a “taxable component” (which most do), and it’s paid to your adult kids on your death, they pay 15% plus the Medicare levy on that chunk. On a $500,000 super balance, that could be $85,000 walking out the door to the ATO.
The good news is, there are ways to reduce this. The most common is called a re-contribution strategy. You withdraw a lump sum from super after age 60 (tax-free at that age), then put it back in as an after-tax contribution. The “taxable component” shrinks. The “tax-free component” grows.
It takes planning, eligibility checks, and the right paperwork, but the savings for your family can be enormous.
If you’re over 60 and haven’t reviewed your super estate plan yet, this is worth a chat with us before the next financial year ticks over.
Common slip-ups that erase your tax savings
A few small mistakes can wipe out your tax benefit faster than you can say “concessional cap”. Here are the ones we see most often.
The biggest is forgetting the Notice of Intent to Claim a Deduction. If you make a personal contribution and don’t lodge this form with your super fund before lodging your tax return, you can’t claim the deduction. The whole strategy collapses.
The next is breaching the contribution cap. Push over $30,000 in concessional contributions, and the excess gets added back to your assessable income, plus interest. Ouch.
Another is forgetting that employer Super Guarantee counts towards your cap. If your boss pays $12,000 in SG, you’ve only got $18,000 of cap left for salary sacrifice or personal contributions.
Then there’s the Tax File Number trap. If your super fund doesn’t have your TFN on file, your contributions can be taxed at the top marginal rate of 47% instead of 15%. Simple fix, but huge impact if missed.
A quick health check with us once a year can stop all of these in their tracks. It’s the kind of small effort that pays back many times over.
Let’s make your super work harder for you
Super doesn’t have to feel like a mystery. With the right plan, it’s one of the simplest ways to cut your tax bill and build real wealth at the same time.
If you’re not sure whether you’re using all the levers available to you, our team can sit down with you and run the numbers. We’ll spot the gaps, flag the risks, and map out a clear strategy that fits your stage of life.
Whether you’re a PAYG employee, sole trader, small business owner, or SMSF trustee, we’re here to help you keep more of what you earn. Reach out to our Epping team for a no-pressure chat, and we’ll take it from there.
You don’t have to figure this out on your own. We’re right here in Melbourne’s north, and we’ve got your back.
