In some circumstances, superannuation contributions can be claimed on your tax return if they are made to a super fund or retirement savings account. However, these circumstances are limited and may require professional advice to maximise the benefits.
Superannuation contributions that are paid by your employers directly to your super fund from your before-income tax cannot be claimed. These contributions include:
- The compulsory super guarantee (increasing to 11% on 1 July 2023)
- Salary sacrificing super amounts
- Reportable employer super contributions.
However, superannuation contributions that you make to your super fund from your after-tax income are able to be claimed. The personal super contributions that you claim as a deduction will count towards your concessional contributions cap.
Super contributions that can be claimed as deductions may include
- contributions made prior to 1 July 2017 if
- they were made to a complying super fund or a retirement savings account (we’ll refer to both as ‘your fund’)
- your earnings as an employee were less than the maximum allowed
- for contributions made on or after 1 July 2017, you made the contributions to your fund that was not a
- Commonwealth public sector super scheme in which you have a defined benefit interest
- Constitutionally protected fund (CPF) or another untaxed fund that would not include your contribution in its assessable income
- super fund that notified us before the start of the income year that they elected to either treat all member contributions to the
- super fund as non-deductible
- defined benefit interest within the fund as non-deductible
- you meet the age restrictions
- you have given your fund a Notice of intent to claim or vary a deduction for personal contributions (NAT 71121)
- your fund has validated your notice of intent form and sent you an acknowledgment.
Certain contributions cannot be claimed as tax deductions. These include:
- a rolled over super benefit
- a benefit transferred from a foreign super fund
- a directed termination payment paid into a super plan by an employer under transitional arrangements that applied until 30 June 2012
- contributions paid by your employer from your before-tax income (including the compulsory super guarantee and salary sacrifice amounts)
- First Home Super Saver (FHSS) amounts that you have recontributed to your super fund(s)
- contributions to
- a Commonwealth public sector super scheme in which you have a defined benefit interest
- a super fund that would not include the contribution in their assessable income, such as an untaxed fund or a constitutionally protected fund (CPF)
- other super funds or contributions specified in the regulations
- contributions made from 1 July 2018 to a super fund that are identified as downsizer contributions
- re-contribution of COVID-19 early release of superannuation amounts.
When deciding whether to claim a deduction for super contributions, you should consider the super impacts that may arise from this, including whether:
- you will exceed your contribution caps
- Division 293 tax applies to you
- you wish to split your contributions with your spouse
- it will affect your super co-contribution eligibility.
If you exceed your cap, you will have to pay extra tax, and any excess concessional contributions will count towards your non-concessional contributions cap.
Before making the claim for the tax deduction against your personal super contributions, your super fund must be notified.You must give a notice of intent to claim or vary a deduction to your fund by the earlier of either the:
- day you lodge your tax return for the year in which you made the contributions
- end of the income year following the one in which you made the contributions.
Your fund must send you a written acknowledgment, telling you they have received a valid notice from you. You must receive the acknowledgment from your fund before you claim the deduction on your tax return.
Maximising your superannuation’s potential could start with boosting your savings with contributions. However, it is advisable to seek professional advice or guidance before commencing, as failure to lodge a notice of intent to claim or vary can become an issue.
Why not start a conversation with us to see how we can assist?