This remains one of the easiest ways to get a tax deduction without losing a cent.
Transfer money into your super account and cut your tax bill. It’s that easy.
This article helps you determine if your super contributions are tax deductible and how they can be made.
There are two types of contributions that can be made into superannuation. These are known as ‘Concessional Contributions’ and ‘Non-Concessional Contributions’.
Concessional Contributions are contributions made to superannuation where a tax deduction has been claimed by a person, business, company or organisation.
Non-Concessional Contributions are contributions made with after-tax money – where a tax deduction has not been claimed.
Are Super Contributions Tax Deductible?
Types of Concessional Contributions
A tax deduction is generally available for the following super contributions.
| Type | Deduction to |
|---|---|
| SG Contributions | Employer |
| Salary Sacrifice Contributions | Employer |
| Other Employer Contributions | Employer |
| Self-Employed Contribution | Self Employed Person |
| Personal Concessional Contributions | Contributor/Member |
If your super contribution is tax deductible, you should be able to deduct 100% of the contribution.
WAIT! Although Salary Sacrifice contributions are deductible to the employer (just like paying wages), the actual tax benefit is to the employee, as less income is taxed at their marginal tax rate.
Types of Concessional Contributions
A tax deduction is typically not available for the following types of contributions:
- Personal Non-Concessional Contributions
- Spouse Contributions
- Co-Contributions
Over age 65? You will need to meet the ‘Work Test‘ prior to making any Self-Employed, Personal Concessional or Personal Non-Concessional contributions.
Are Super Contributions Tax Deductible?
Contribution Caps
There are limits to the level of contributions that can be made into your superannuation account each year. More information can be found here.
Considerations
If a tax deduction is claimed for a contribution made to superannuation it will incur superannuation contributions tax at 15% – and more for high income earners. It will also form part of the ‘taxable’ component within superannuation, which may incur tax upon withdrawal and if paid to a non-tax dependent, such as an adult child, in the event of your death.
Tax Advice
It is necessary for you to obtain independent tax advice in relation to determining if your super contributions are tax deductible.
If you would like anything clarified or have any further questions about Are Super Contributions Tax Deductible? or any other topics, please do not hesitate to leave a comment in the section below and I will endeavour to respond within 24 hours.
