Case Study: MilitarySuper

Joel can contribute before-tax and after-tax amounts to his super. These will be in addition to his member contribution of 5% of his super salary* that he’s currently contributing fortnightly to his MilitarySuper.

These additional amounts will be invested in Joel’s chosen investment option and paid as a lump sum when he claims his final benefit­, either as a Member benefit or an Ancillary benefit, depending on the type of contribution.

For more information about the tax treatment of each contribution type, see the MilitarySuper PDS Booklet—Tax and your MilitarySuper.

*Super salary is the member’s annual rate of pay plus certain recognised allowances.

After-tax contributions

There are two after-tax contribution options for Joel. He can:

• increase his current 5% member contributions; and/or
• make additional regular or one-off after-tax contributions.

Increasing his member contribution

Joel could increase his current 5% member contribution. MilitarySuper allows him to contribute up to 10% of his super salary as an after-tax contribution each fortnight until he reaches his Maximum Benefit Limits (MBL). 

He can increase this contribution once in any 3-month period.

These contributions and the investment earnings on them make up Joel’s Member benefit.

*increasing contributions to 10% may cause members with long service to hit their MBL sooner which could impact retirement plans.

Additional after-tax contributions

Joel could also choose to make additional after-tax contributions. These can be paid regularly as a set amount or as one-off contributions, directly to CSC.

These contributions and the investment earnings on them form part of Joel’s Ancillary benefit.

Before-tax contributions

Salary sacrifice is the only before-tax option that Joel can use to make before-tax contributions. Personal deductible contributions are not an option with MilitarySuper.

Salary sacrifice contributions are voluntary contributions paid from Joel’s before-tax salary. These can be made in addition to his regular fortnightly after-tax contributions.

Salary sacrificing helps to reduce Joel’s taxable income while adding to his super balance. He can arrange his salary sacrifice contributions through Defence payroll.

These contributions and the investment earnings on them form part of Joel’s Ancillary benefit.

Although Joel can decide how much he wants to add to his super, he needs to consider the caps set by the ATO

Contribution caps

Contribution caps are limits on concessional and non-concessional super contributions. They are set by the ATO and reviewed each year.

If Joel exceeds either of the caps, the excess will be included in his assessable income and taxed at his marginal rate with a 15% offset to account for the contributions tax already applied. For more information about contribution caps, see the ATO.

• Concessional contributions cap (before tax)

  This is the maximum amount of before-tax contributions, such as compulsory Superannuation Guarantee and salary sacrifice contribution amounts, that can be contributed to a member’s super each financial year without contributions being subject to additional tax.

  For the 2025–26 financial year, the concessional contributions cap is $30,000.

• Non-concessional contributions cap (before tax)

  This is the maximum amount of after-tax contributions that a member can contribute to their super each year without their contributions being subject to additional tax.

  For the 2025–26 financial year, the non-concessional contributions cap is $120,000.

  
  

  Exceeding the non-concessional contributions cap

  If Joel’s total after-tax contributions exceed the $120,000 cap, he could consider the ATO’s bring-forward arrangement. This would allow him to contribute more than $120,000 without incurring additional tax, subject to specific requirements.

  Joel also has access to the ‘carry forward unused contribution cap amounts’. If he has unused concessional cap amounts from previous years, he may be able carry them forward to increase his contribution caps in later years. He’s eligible if he has:

  • a total super balance of less than $500,000 at 30 June of the previous financial year*
  • unused concessional contributions cap amounts from up to 5 previous years

  *Note: MilitarySuper members under 55 don’t have an employer benefit reported against their Accumulation Phase Value.