What is concessional? Concessional is a term used to describe favourable tax treatment. For example, earnings in superannuation funds receive concessional tax treatment. The term 'concessional contributions' means that such contributions receive special tax treatment.

Generally, a concessional contribution is a contribution that is made by or for you to a complying super fund and is assessable income of the fund (which means that the fund will pay tax on the contribution). If the contributor is able to claim an income tax deduction for the contribution, the contribution effectively comes from their ‘before-tax’ income.

Concessional contributions include:

• employer contributions such as
• compulsory super guarantee contributions
• any additional voluntary super contributions your employer may make
• any fund costs paid by your employer on behalf of your super fund, such as administration fees and insurance premiums the equivalent of your employer contributions under a defined benefit scheme as determined by the trustee salary sacrifice amounts

Personal contributions by an eligible person (such as a self-employed person) that are allowed as an income tax deduction transfers from reserves (as defined by the regulations to the legislation) the taxable component of a directed termination payment (or the total of directed termination payments plus any transitional eligible termination payments) in excess of $1 million.