Spouse Contributions

A spouse contribution is your after-tax money paid directly into your partner's super fund. The fund treats it as the spouse's non-concessional contribution - it counts toward their $130,000 annual cap for 2026-27, not yours - whether or not any offset applies. The contribution may earn you a tax offset of up to $540 a year, which is 18 percent of up to $3,000, if your spouse's income is below $40,000.

The income test for the offset counts more than the payslip: assessable income, total reportable fringe benefits and total reportable employer super contributions, added together. Both partners must be Australian residents, not living separately on a permanent basis, and the receiving spouse must be under 75. There is a second, separate mechanism - contributions splitting - which rolls your own concessional money to their fund and counts toward your cap, not theirs.

The offset formula is a lesser-of test. The offset is 18 percent of the lesser of $3,000 minus the amount your spouse's income exceeds $37,000, or the contribution itself. A spouse earning $25,000 with a $3,000 contribution earns the full $540. A spouse earning $38,500 earns 18 percent of $1,500 - $270. At $40,000 of income the offset is gone entirely, which is a $3,000 income band doing all the work.

The mechanics run through your tax return. You contribute to their fund - by Bpay from your own account, with their super member number as the reference - and claim the offset at item T3 in your return for that year. The ATO checks the spouse's income, their non-concessional cap position and their total super balance against the general transfer balance cap of $2 million at the start of the income year. The offset reduces your tax bill; it is non-refundable, so unused offset is not paid out as cash.

Contributions splitting is the second mechanism and it works differently. You apply to your own fund after the end of the income year to roll up to 85 percent of your concessional contributions - including the guarantee - to your spouse's fund. The split is a rollover: it counts toward your cap, not theirs, and it earns no offset. If you want a deduction on the money being split, the notice of intent goes to your fund before the split application.

For an Australian household with one low-income partner, spouse contributions are the cheapest way to build the second super account - and the only one that pays you $540 for doing it. The ATO's spouse super contributions page is the authority, and the offset stacks with the compounding: a $3,000 contribution into a spouse earning nothing grows inside their fund at 15 percent fund tax and pays you $540 in the same year. Over a decade the $3,000-a-year pattern is roughly $30,000 of super built and roughly $5,400 of offsets claimed. The non-concessional contributions entry covers the cap the money eats.

A colleague named Brent (yes, that Brent) contributed $3,000 to his wife's super while she earned $41,000 and claimed the offset at tax time. The offset needed income under $40,000; at $41,000 it was $0, and the $3,000 had already been spent. The highest-leverage thing most Australians can do is read the income test before the contribution - then price the household with the Australian income tax calculator to see where the offset lands.