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Tax Deduction on Super Contributions

By H&R Block 3 min read

You can make additional contributions up to your concessional contributions cap ($25,000 for the 2021 year, increasing to $27,500 for the 2022 year) and claim an income tax deduction for doing it.

This means you can tax effectively top up your super, provided you don't breach your concessional contributions cap.  The super guarantee payments made by your employer, as well as any salary sacrificed  contributions, are also included in your concessional contributions so effectively the  amount you can pay into super through a tax deductible contribution is the difference between those other contributions and the cap.

A 15% contributions tax is deducted from any superannuation contribution that has  been claimed as a tax deduction.

If you are aged between 67 and 74 years of age, you'll need to pass the work test to  make a tax deductible contribution. That means that you have to work 40 hours or more  in a consecutive 30 day period in the financial year in order to make contributions.

Example

Todd is a fulltime dental assistant. During 2020-21, he earned $50,000 before tax. Todd  has no other income. Todd makes a personal contribution to an eligible superfund and  notifies them that he intends to claim a deduction. Todd's superfund acknowledges  that Todd will claim a $15,000 deduction and taxes the contribution at 15%. Todd is eligible to claim a deduction for $15,000 on his 2021 Income tax return.

Tip

As well as making super contributions from your self-employed income or employment  income, it is also possible to make super contributions from investment income  (including dividends or rental income) and capital gains.

If you want to claim a tax deduction for your super payment, it must be made by  June 30th and you need to advise your super fund that you've made the payment by the  time you lodge your tax return. H&R Block or your super fund can give you guidance on  how to complete the form.

From the 2019 year onwards, if your concessional contributions were less than the cap for any year ($25,000), the unused concessional contributions for each year from 2019 onwards can be brought forward (for up to 5 years) and used in a later year. 

This information sheet is intended as a guide for H&R Block clients. All actual detail and circumstances differ,  please discuss your situation with a H&R Block Tax Consultant.  H&R Block is Australia's largest network of tax accountants with over 470 offices. Every year we help  thousands of Australians achieve a better taxation result. For your nearest office call 13 23 25.

September 2019

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