Time's almost up to get a tax deduction for your super contribution. AND get a guaranteed return!

Get a tax deduction for your super

As of 1 July 2017,

-  all tax-payers under age 75 can make a personal contribution to their super fund and

- then you can claim a deduction for your super contribution when you do your tax return.

This is new. Until now, the only way to make additional deductible contributions was to organise a salary sacrifice with your employer, unless you were self –employed.

Contribution limits

-You can contribute any amount provided that your total concessional contributions * are not more than $25,000 in a particular financial year.

- this includes the compulsory super your employer contributes (9.5% super guarantee) which are also concessional contributions.

E.g. If your employer has contributed $10,000 on your behalf, you can make an additional  maximum contribution of $15,000.

Age limits and work test

If you are 65 – 74 years, you also have to meet a work test  to qualify for the tax deduction.

Self-managed super

If you have a self-managed super fund, you can still make personal contributions


You get to save money AND pay less tax

Your personal contributions will be taxed at 15% when they arrive in your super fund. And if your personal marginal tax rate is more than 15%, then what you save in tax will be more than the amount that the super fund pays in tax.

E.g., If your tax rate is 37 %, and you contribute an extra $10,000, you will receive a personal tax deduction of $3700.

So the contribution only costs you $6,300 :  $10,000 you contribute - your $3700 tax rebate .

In your super fund, only $1,500 will be paid as tax.


True fact – you get a guaranteed return!

You’ve given up $6,300 of spending power and acquired an asset worth $8,500!

That’s an immediate, guaranteed return of 34.9%  ie $2,200 of the $6,300 that the contribution actually cost you.

A guaranteed return of 34.9% is absolutely outstanding - you can’t beat it!


What’s the catch?

The only catch is that money contributed into super stays there until you meet a condition of release.  

And the most common condition of release is reaching retirement age.

The government offers a lower tax on these concessional contributions as incentive to encourage people to save for retirement.

So that making regular (and tax-advantaged) super contributions when you are working means you're more likely to have significant savings to help pay for your life after work.


Timing - do it before 30 June 2018.

Any additional contribution you make has to be recorded as being received by your super fund before the end of this financial year.

That’s just 8 weeks from the date of this post .


Next steps

Before you make an extra contribution, we recommend you talk to us to discuss whether any extra personal contributions make sense for in your particular case.

* concessional contributions = taxed at 15% when received into your super fund






Elizabeth Hatton