If you contribute some of your after-tax income or savings into super, you may be eligible to claim a tax deduction. This means you’ll reduce your taxable income for this financial year – and potentially pay less tax. And at the same time, you’ll be boosting your super balance.

How it works

The contribution is generally taxed at up to 15% in the fund (or up to 30% if you earn $250,000 or more). Depending on your circumstances, this is potentially a lower rate than your marginal tax rate, which could be up to 47% (including the Medicare Levy) – which could save you up to 32%.

Once you’ve made the contribution to your super, you need to send a valid ‘Notice of Intent’ to your super fund, and receive an acknowledgement from them, before you complete your tax return, start a pension, or withdraw or rollover the money.

Keep in mind that personal deductible contributions count towards the concessional contribution cap, which is $27,500 for the 2021/22 financial year. However, you may be able to contribute more than that without penalty if you didn’t use the whole cap in 2018/19, 2019/20 and 2020/21 and are eligible to make ‘catch-up’ contributions.

Concessional contributions also include all employer contributions, including super guarantee and salary sacrifice.

The above information is only general in nature and should not be considered specific advice.  Each individual’s circumstances needs to be assessed. If you have questions in relation to the above, or any other matters, please do not hesitate to contact our office on 1300 620 345.