EOFY Savings: Claim Tax on Super Contributions

With tax time fast approaching, you’re likely to have seen plenty of ‘EOFY SALE!’ advertisements around, urging you to take advantage of the discounts and save big. Something that you probably haven’t seen advertised, but can definitely help you save money—not only now, but also in the long run—is the chance to claim tax on your super contributions. Instead of splashing your hard-earned cash at retail stores this end of financial year, why not invest in your own retirement and get some of that money back in your pocket? 

How to claim tax on your super contributions

If you want to claim tax on a super contribution, it must be an after-tax contribution. This means the money must come from a bank account, your savings, an inheritance, or profit you’ve made from selling an asset1. Contributions you make to your super fund will be taxed at a lower rate of 15% (30% if you earn $250,000+ in the financial year). This is especially advantageous if you’ve come into some extra funds, which you would usually pay tax on at your full marginal rate. 

Another bonus? If you have to pay capital gains tax on an asset that you’re selling, contributing the proceeds of that sale to your super means you can then claim it in your tax return. This could lessen or completely remove the owed capital gains tax1

Watch out for contribution caps

When contributing to your super, it is important to ensure that you don’t exceed the concessional contribution cap of $25,000 per financial year, or you will have to pay extra tax2. Concessional contributions are those contributed before tax, and include: 

  • Employer contributions, such as
    • Compulsory employer contributions
    • Any additional concessional contributions your employer makes
    • Salary sacrifice payments made to your super fund
    • Other amounts paid by your employer from your before-tax income to your super fund, such as administration fees and insurance premiums
  • Contributions you are allowed as an income tax deduction
  • Notional taxed contributions if you are a member of a define benefit fund, which reflects the increase to your benefits for the year; it is the equivalent of an employer contribution
  • Unfunded defined benefit contributions
  • Some amounts allocated from a fund reserve.2

You should also remember that contributions only count once the payment has been received by your fund. If you want to claim tax for contributions made this financial year, your contributions will have to be received by your fund by June 302

How to claim for personal contributions

In order to claim for your personal contributions, you must first give your super fund a Notice of intent to claim or vary a deduction for personal contributions form and receive an acknowledgement from your fund3

This article provides general information only. You should always consult your personal accountant before making tax-related decisions. 

1 https://www.amp.com.au/superannuation/super-contributions/tax-deductible-super-contributions

2 https://www.ato.gov.au/Individuals/Super/In-detail/Growing-your-super/Super-contributions—too-much-can-mean-extra-tax/?anchor=Applyingtohavecontributionsdisregardedor#Applyingtohavecontributionsdisregardedor3https://www.ato.gov.au/Individuals/Super/In-detail/Growing-your-super/Claiming-deductions-for-personal-super-contributions/