This measure is designed to assist an employee where their employer won’t allow salary sacrifice contributions, or where the employer reduces an employee’s SG entitlement when salary sacrificing or the employee is also self-employed.
Eligibility Rules
You can claim a deduction for personal super contributions made on or after 1 July 2017 if:
- You made the contribution to a complying super fund or a retirement savings account (see note below on non-complying funds).
- You meet the age restrictions
- You notify your fund in writing of the amount you intend to claim as a deduction
- Your fund acknowledges your notice of intent to claim a deduction in writing
How Much Can I Contribute?
You must not exceed $25,000 (including any contributions made on your behalf by your employer). e.g. if you earn $50,000 pa, then your employer will contribute $4,750 so you can contribute up to $20,250.
How Much Tax Does the Super Fund Pay on the Contribution?
All pre-tax (concessional) contributions are taxed at 15% in the super fund. So there is no benefit to contributing if it will bring your income below the tax free threshold ($18,200).
Age Restrictions
If you are 75 or older then you can only claim a deduction for contributions you made on or before the 28th day of the month following the month in which you turn 75.
If you are under 18 at the end of the income year in which you made the contribution, you can only claim a deduction for your personal super contributions if you earned income as an employee or a business operator.
Work Test (For People Aged 65 to 74)
The work test must be satisfied each year that you want to claim a deduction for a super contribution. To satisfy the test you must work at least 40 hours during a consecutive 30 day period each financial year.
Non-Complying Funds
- Commonwealth public sector superannuation scheme in which you have defined benefit interest
- CPF or other untaxed fund that would not include your contribution in its assessable income
- Super fund that notified the ATO before the start of the income year that they elected to treat all member contributions to
- The super fund as non-deductible; or
- The defined benefit interest within the fund as non-deductible
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