From 1 July 2017, you can make additional concessional contributions up to your concessional contributions cap (currently $25,000) and claim an income tax deduction for doing it.  Prior to 1 July 2017, only the self-employed and those not working were able to claim such a tax deduction (and then only if you received less than 10% of your total assessable income from employment).

The removal of the 10% income restriction greatly increases the capacity for you to top-up your super fund, 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 $25,000 cap.

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

If you are aged between 65 and 74 years of age, you’ll still 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 2017-18, 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 and does this in his 2018 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.