Carry Forward Rules for Super Contributions
What is Superannuation Carry Forward?
Superannuation carry forward is a tax strategy that allows you to use unused concessional contribution room from previous years to make larger tax-deductible contributions in future years. If you didn't maximize your contributions one year, you can "roll over" that unused room up to five years into the future – giving you flexibility and tax benefits.
Key Rules at a Glance
If your superannuation fund balance is less than $500,000, you have powerful flexibility:
- ✅ Carry forward unused concessional contributions for up to 5 years
- ✅ Contribute more in high-income years when you have cash flow
- ✅ Maximize tax deductions on larger contributions
- ✅ Balance contributions around life circumstances (career breaks, sabbaticals)
- ❌ No carry forward once balance exceeds $500,000
This rule has applied since 1 July 2018, and provides valuable flexibility for self-employed people, those with variable income, and anyone wanting to optimize their super contributions tax-efficiently.
How Carry Forward Works: Timeline
The unused contribution room accumulates and becomes available the following financial year:
- FY 2023-24: Unused room → becomes available FY 2024-25
- FY 2024-25: Unused room from 2024 + 2025 → becomes available FY 2025-26
- Maximum: Up to 5 years of unused room can be carried forward (oldest room expires after 5 years)
What are Concessional Contributions?
Concessional superannuation contributions are those made to your super fund before tax. This includes compulsory employer superannuation guarantee contributions, additional employer before-tax super and salary sacrifice amounts.
It may also include personal contributions you make as tax deductions, for example, sole traders who contribute to their own super fund.
Real-World Examples
Example 1: Undercontribution in Prior Years
Scenario: Sarah contributed only $15,000 each in FY 2022-23 and FY 2023-24 (below the $27,500 cap)
| Year | Limit | Contributed | Unused Room |
|---|---|---|---|
| FY 2022-23 | $27,500 | $15,000 | $12,500 |
| FY 2023-24 | $27,500 | $15,000 | $12,500 |
In FY 2024-25: Sarah can contribute $27,500 + $12,500 + $12,500 = $52,500 (above normal cap)
Example 2: Self-Employed Catch-Up
Scenario: Marcus (self-employed) made no super contributions from FY 2019-20 to FY 2023-24
- 5 years × $25,000 (2019-20 caps) = $125,000 unused room
- In FY 2024-25: Can contribute $125,000 + current year room = massive catch-up opportunity
This is a powerful tool for self-employed people with variable income!
Concessional Contributions Checklist
- Check your superannuation balance as at 30 June 2020. Was it less than $500,000?
- What did you contribute to super in the 2019 & 2020 financial year?
- If you contributed less than $25,000 in 2019 & $20,000 and you have available cash flow, consider topping up to the threshold, even if you don’t pay the full $25,000 this tax year. You can always carry forward this year’s threshold balance and top-up in a future year.
- What is the last date your super fund will accept payments? It will probably be at least a week before the end of the financial year.
Related Super Strategies
Maximize your retirement planning by combining carry forward rules with other superannuation strategies:
- Super Contribution Splitting – Transfer contributions to your spouse to balance retirement savings
- Use carry forward in high-income years
- Combine with spouse contributions for additional flexibility
- Plan for your partner's retirement alongside your own
Next Steps
Get advice before making extra contributions
If you contribute too much to your super fund you may end up with a tax bill! If you're keen to get the tax benefits of maximum contributions, contact us now before your super fund deadline and we'll help you build your super balance. We can also help you start planning for the following year's contributions.
ThinkWiser Accountants provides expert Accounting, Bookkeeping, and Taxation services to small businesses and individuals across Australia. Our team stays current with all changes to super rules and can help you optimize your contributions.