There is often confusion around tax deductions for superannuation contributions.

Deductions can be claimed where made on behalf of ‘arms length’ employees and self-employed individuals.

Using the 2014/2015 tax year as an example, there are two concessional cap limits, dependent on age:

  • Under 50   –  $30,000
  • 49 years or over within the 2014/15 year   – $35,000

An employer can claim a tax deduction for the value of contributions made in the form of assets, like shares and real property. If such contributions are made in conjunction with a remuneration package, an employment agreement must exist, documenting the employment relationship and consideration for services.

  • It is essential that contributions are receipted by the superannuation fund prior to 30 June of the financial year that the deduction will be claimed.
  • Therefore you should allow for adequate time before 30 June to allow contributions to be received by the super fund.
  • Employers must be aware of contribution caps and must not to exceed those caps.
  • Contributions made for the benefit of an associate may also be tax deductible.
  • Self-funded retirees can also take advantage of these deductions for superannuation contributions up to age of 75 years of age.

If you’re approaching 65 years and wish to make large non-deductible contributions above the annual amount of $180,000, consider accessing the bring-forward rule before this time. Ask us if you’re not sure.