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:

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.

Chris Strano

Chris Strano is a specialist independent superannuation author for SuperGuy.com.au - one of Australia's leading superannuation information resources.

More Posts - Website