As the end of the financial year approaches, it’s the ideal time to explore ways to legitimately reduce your tax bill and boost your retirement savings. Whether you’re an employee, investor, or nearing retirement, small strategic steps now can have meaningful long-term benefits.
Make the Most of Tax Deductions
If you’ve made charitable donations during the year or are planning to, remember they’re tax-deductible if given to a registered charity. Similarly, if you have an investment loan (such as for an investment property or shares), consider pre-paying 12 months of interest before 30 June — the deduction could reduce your 2025 tax bill.
And don’t forget superannuation. Contributions to super made from your personal funds can also be deductible (more below), giving you a double benefit: reduce tax now and grow your future retirement nest egg.
Superannuation Contributions – Powerful, Flexible, Tax-Effective
Concessional (pre-tax) contributions: You can contribute up to $30,000 this year into your super from your pre-tax income — this includes employer payments, salary sacrifice, and personal contributions where you intend to claim a deduction. These contributions are taxed at just 15% inside super (or 30% for high earners), which may be lower than your marginal tax rate. That means you save tax now and add to your retirement savings in a tax-friendly environment.
Using unused contribution caps: If you didn’t reach your contribution limit in earlier years (since FY2020), and you had less than $500,000 in super at the start of this financial year, you may be able to “catch up” and contribute more this year. This is especially useful if you've had a higher income year due to a bonus, capital gain, or windfall — and want to offset that income with extra deductible contributions.
Government co-contribution: If you’re a low or middle-income earner (earning less than $45,400) and make a non-deductible contribution to super, the government may boost your super with a co-contribution of up to $500. It’s a great way to get an effective return on a relatively small contribution — and build your retirement savings with help from the government.
Spouse contribution tax offset: If your spouse earns less than $40,000, contributing up to $3,000 to their super could give you a tax offset of up to $540. It’s a smart strategy to support your partner’s retirement savings while reducing your own tax bill.
Contribution splitting with your spouse: Want to balance out super between you and your spouse or help them access funds earlier? You may be able to “split” up to 85% of your concessional contributions with your spouse (subject to age and work status). This can also help with Centrelink planning and tax-free income later in retirement.
Important Considerations for Over 67s
Work test for contributions: If you’re aged 67–74 and want to make personal deductible contributions to super, you need to meet the “work test” — that’s working 40 hours in a 30-day period during the financial year. If you recently retired, a one-off exemption may apply if your super balance is under $300,000.
Planning to Downsize?
Downsizer contributions: If you're 55 or older and sell your long-term family home (owned for 10+ years), you may be able to contribute up to $300,000 (each, for a couple) from the proceeds into super — without affecting your normal contribution caps. The catch? The contribution must be made within 90 days of settlement, so timing is crucial.
In Pension Phase? Don’t Miss Your Minimum
If you’re already drawing a pension from your super, make sure you've withdrawn at least the minimum required amount before 30 June. This is based on your age and your pension account balance as at 1 July 2024. If you're in an SMSF, this needs to be monitored closely — the ATO may penalise funds that don’t meet the obligation.
Looking Ahead: Key Superannuation Changes from 1 July 2025
- Transfer Balance Cap Increase:
The limit on how much super you can move into the tax-free retirement (pension) phase will increase from $1.9 million to $2.0 million. If you’re nearing retirement, this gives you more room to grow your super balance in a tax-free environment. - Employer Super Rate Increase:
From 1 July 2025, the Super Guarantee rate rises to 12% — this means your employer will be putting more into your super each pay, which adds up over time.
Post-Election Policy Outlook for Individuals
Following the 2025 Federal Election, several key proposals are expected to return to the legislative agenda. While not yet law, these potential changes could impact superannuation, student loans, energy rebates and deductions — and are worth keeping on your radar.
Superannuation Tax on Balances Above $3 Million – Division 296
Previously mentioned to commence from 1 July 2025, this potential measure introduces an additional 15% tax on earnings where a member’s Total Superannuation Balance exceeds $3 million. The tax is calculated based on the difference between the opening and closing balances for the year, meaning unrealised capital gains could be taxed.
We understand this proposed change is causing concern for many clients. While the measure has not yet passed Parliament, we are monitoring it closely. If reintroduced, we will provide clear guidance on its implications and the strategies available to manage its potential impact. Our team is committed to keeping you informed every step of the way.
Click here for more information on Division 296.
Pay Day Super
Initially announced in the 2023 Federal Budget, this reform requires employers to pay superannuation contributions at the same time as salary payments, rather than quarterly. If passed, it will take effect from 1 July 2026.
This measure aims to improve transparency and help employees better track their super.
Student Loan Relief
As announced in the 2025 Budget, the Government has announced it will introduce a 20% reduction on all outstanding HELP and student debts as at 1 June 2025.
Also proposed is an increase to the minimum HELP repayment threshold from $54,435 in 2024–25 to $67,000 in 2025–26, easing the repayment burden for many graduates.
Power Bill Relief for Households
The Government has proposed to extend its energy rebate program by offering:
- $150 in total rebates for eligible households
These payments are to be delivered as two quarterly instalments of $75, starting 1 July 2025, and run through to 31 December 2025.
New $1,000 Standard Tax Deduction for Work-Related Expenses
The Government has proposed that from the 2026–27 income year, individuals will be able to opt for a $1,000 standard deduction for work-related expenses without needing to keep receipts.
Those with deductible expenses exceeding $1,000 can still claim the higher amount under existing rules.
Proposed Abolition of the Luxury Car Tax (LCT)
The Government is considering scrapping the 33% Luxury Car Tax, as part of ongoing trade negotiations with the European Union.
This tax currently applies to vehicles exceeding:
- $91,387 for fuel-efficient vehicles
- $80,567 for all others
Abolishing this tax could lower the cost of certain vehicles in Australia.
This EOFY, a few small steps can make a big difference. Speak with your advisor about what strategies suit your income, super balance, and goals. Contact us today on 1300 795 515 or email mail@prosperity.com.