Making Superannuation Contributions
There are a number of ways to contribute money into superannuation, with different tax and benefit consequences. Contributions caps per person per year are:
Deductible contributions under 50years old $25,000 per year and over 50years $50,000 (with balances under $500k).
These are not eligible for government co-contribution.
Non Deductible contributions are capped at $150k per year, however you can bring forward 2 years to make a one off contribution of $450k.
Non Deductible contributions are eligible for government co-contribution if income tests are met. $1 for $1 if your assessable income is under $31,920, which reduces to no benefit once income is over $61,920.
Employees
The only way to make tax deductible contributions is via salary packaging / salary sacrifice. These contributions are known as employer concessional/deductible contributions.
Non deductible contributions can be made with your after tax net wages and these may be eligible for government co-contribution depending on your income. These contributions are known as member non-concessional/non-deductible contributions.
Business owners
You are able to make tax deductible contributions from your business if you are a sole trader or in a partnership. These contributions are called member concessional/deductible contributions.
Those businesses in companies and trusts can make contributions on behalf of business owners. These contributions are known as employer concessional/deductible contributions.
Non-Deductible contributions should be made from personal accounts, not business accounts. Depending on your income these may be eligible for government co-contribution. These contributions are known as member non-concessional/non-deductible contributions.
Ensure with your superannuation fund that you are notifying them of the correct contribution types so you are able to claim a tax deduction if application or receive the government co-contribution.
Please do not hesitate to contact our office for any further assistance you need with superannuation and taxation planning.
Nathan Morris is a Fellow of the Taxation Institute of Australia, and associate of CPA. He has over 13 years experience in tax and business advisory services. Nathan's difference is in educating his clients and extended network all things tax and business to "get ahead".
Establishing his own practice in 2007 he has grown this small tax practice into a successful tax and business advisory practice with over 5 staff servicing over 600 clients.