The maximum co-contribution of $500 is reduced by 3.333 cents for each $1 of income earned over $39,837, and cuts out when your total adjusted taxable income reaches $54,837 (thresholds for 2020/21).
For example, if your total income was $25,000 and you made a personal non-deductible contribution of $1,000 to super prior to 30 June this financial year, the government would make a co-contribution of $500 to your super fund.
Let’s assume you earn $44,837, which is $5,000 above the lower threshold of $39,837. The maximum co-contribution will reduce by 3.333 cents for every $1 in excess of $39,837.
Therefore the reduction is $0.03333 times $5,000, which is $166.65. So the maximum co-contribution will now be $333.35 (i.e. $500 – $166.65).
To determine your eligibility the Australian Tax Office has an online calculator at www.ato.gov.au.