No, Super Contributions Aren't Always Taxed at 15% for High Earners — It Depends on Your Income

The claim is a staple of financial planning conversations: put money into super as a concessional contribution, pay only 15% tax instead of your much higher marginal rate, and pocket the difference. It's partially true — but it leaves out a significant catch that applies to Australia's highest earners.

For most workers, the 15% contributions tax rate is accurate. The Australian Taxation Office confirms that concessional contributions — things like employer super and salary sacrifice — are taxed at 15% inside the fund. For someone on a 32.5% or 37% marginal rate, that's a genuine and meaningful saving. The Australian Treasury's Tax Expenditures and Insights Statement 2023 confirms this concession is most valuable for earners in exactly those brackets.

But the story changes sharply above $250,000 in income. Since 2012, the ATO has applied what's called Division 293 tax — an additional 15% levy on concessional contributions for high earners. That brings their effective rate to 30%, not 15%. So for someone on the top marginal rate of 45% plus the 2% Medicare Levy, the saving is real but much smaller than the headline claim implies. The Grattan Institute and the Parliamentary Budget Office both confirm this: the 15% figure simply does not apply to the highest-income Australians.

To be fair to the claim, it does capture something real. For earners between roughly $80,000 and $190,000, the gap between their marginal rate and the 15% contributions tax is substantial, and super remains one of the most tax-effective vehicles available. The claim isn't invented — it's just incomplete and misleading when applied to all "higher-income earners" as a single group.

This kind of half-truth travels fast because it reinforces two very different narratives at once: critics of inequality use it to argue the system favours the wealthy, while financial advisers use it to promote salary sacrifice strategies. Both audiences have reason to repeat it, and neither always stops to check where the threshold sits.