Fifty Cents in the Dollar, Up to a Cap, Phasing Out
The government co-contribution matches personal after-tax contributions at 50 cents in the dollar, up to a maximum, for people whose income is below a threshold. It phases out as income rises and reaches nil at an upper limit. For someone eligible for the full amount, it is an immediate 50% return on the contribution, which is the highest guaranteed return available anywhere in the retirement system.
- The answer: A personal after-tax contribution attracts 50 cents in the dollar up to a maximum co-contribution, reducing as income rises above the lower threshold.
- The trap: The contribution must be non-concessional. Claiming a deduction for it makes it concessional and removes the co-contribution entirely.
- The recommendation: Where you are eligible, contribute at least the amount that attracts the full co-contribution. Nothing else in the system pays 50%.
Where the AI summary above gets this wrong
"The government will add money to your super if you make extra contributions."
That's surface-true. Here's what it misses:
- Only non-concessional contributions qualify — Claiming a deduction converts the contribution to concessional and removes the co-contribution. The two measures are mutually exclusive on the same dollars.
- Income for the test includes reportable employer contributions — Salary sacrificing can push you over the threshold and out of eligibility, which is one of the few places the reportable add-back actually bites.
01 How the matching works
You make a personal after-tax contribution to super without claiming a deduction. Where your total income is below the lower threshold, the government contributes 50 cents for every dollar, up to a maximum co-contribution.
Above the lower threshold the maximum reduces at a set rate for each dollar of income, reaching nil at the upper threshold. The thresholds are indexed and published with the other key super rates.
The payment is calculated by the ATO from your tax return and paid directly into your fund. Nothing is claimed, and the fund must hold your tax file number for the payment to be made.
Source: ATO — Super co-contribution
02 The conditions
At least 10% of your total income must come from employment or carrying on a business, which excludes someone living entirely on investment income. You must be under 71 at the end of the income year and lodge a return.
Your total super balance must be below the general transfer balance cap at the previous 30 June, and the contribution must be within your non-concessional cap.
Income for the test is total income including reportable employer superannuation contributions, which is where a salary sacrifice arrangement can inadvertently end eligibility — the point made in the reportable contributions post.
Shows: the government co-contribution on a personal after-tax contribution, after the phase-out at your income. Ignores: the 10% employment income test, the total super balance test, and the non-concessional cap.
03 Why it is worth prioritising
A 50% immediate return, guaranteed, with no market risk, is not available anywhere else. For an eligible household it should come before almost any other voluntary contribution.
It stacks with the low income super tax offset, which refunds contributions tax on concessional contributions separately — the two apply to different contributions and both can be received in the same year, as described in the LISTO reference.
The practical obstacle is cash flow rather than eligibility. The contribution has to be made from after-tax money before 30 June, and the co-contribution arrives months later after the return is processed.
It is also worth making for a spouse with low income, where the same contribution can attract both the co-contribution for them and the spouse contribution offset for you — two separate measures on the same dollars, which is unusual in this system and worth checking against the current thresholds.
A guaranteed 50% return with no market risk is not something the financial system offers anywhere else, and it is available to exactly the households least likely to have a spare thousand dollars before 30 June. If the cash flow can be arranged, this is the first voluntary contribution worth making.
FAQ
How much super co-contribution will I get if I earn $40,000 and contribute $1,000 after tax?
Below the lower income threshold the government matches at 50 cents in the dollar up to the maximum co-contribution, so a $1,000 contribution attracts $500 where the maximum allows it.
Does claiming a deduction affect the co-contribution?
Yes, and fatally. Only non-concessional contributions qualify. Claiming a deduction converts the contribution to concessional and removes the co-contribution entirely.
What income is tested?
Total income including reportable employer superannuation contributions, so salary sacrificing can push you over the threshold and out of eligibility.
Sources
Regulator references
- ATO — Super co-contribution · Australian Taxation Office · 2026The government super co-contribution and the income test that determines it.Last verified: 2026-09-07
- ASIC Moneysmart — Super contributions · ASIC Moneysmart · 2026The types of super contribution — employer, salary sacrifice, personal and spouse — and their caps.Last verified: 2026-09-07
Calculator unit tests · the assertions this page's worked example is checked against, and their last result
Changelog
- 2026-09-07 — initial publish (new format)
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Jordan Reeves
Founder of Talk Through Wealth. A software engineer for over a decade before turning to retirement planning, Jordan built the projection engine after watching family members get fragmented, country-by-country advice that never reconciled. He writes about retirement the way the engine computes it: month-by-month, lifetime-long, and skeptical of any rule of thumb that hasn't been run through the math.