Are You Eligible For Tax Deductible Super Contributions?


If you are currently making or have made contributions into your super after-tax, you could be eligible for a tax deduction.

Most working Australians can claim this tax deduction based on the super contributions they have made after-tax. This will include when you transfer funds from your bank account into your super fund.

In the past, only people who were unemployed, self-employed, retired or earning less than 10% of their income as an employee could claim a tax deduction on super contributions. This has changed and the opportunity is now available to anyone who can take advantage of it.

Are You Eligible For Tax Deductible Super Contributions

How Tax-Deductible Super Contributions Work And The Benefits

There are a few ways that you can make a super contribution after tax. This could be from the sale of an asset or through money in your regular bank account, savings or an inheritance.  Once you have made a contribution, you can claim a tax deduction at tax time.

According to the legal experts at Drink Driving Defence Melbourne, the tax deduction is based on the amount of the contribution and listed in your tax return. They explain, “this can be beneficial because these contributions are taxed at a rate of 15% if you earn less than $250,000 per year. If you earn over this amount, the contribution is taxed at 30% which is generally lower than what you would pay on your taxable income.”

In addition to this, you could have a further tax benefit from the investment earnings.  Your investment earnings will benefit from an equivalent tax savings which can make a big difference later on. This is particularly important when you want to withdraw the super savings and retire.

If you receive some extra money that you would have to pay tax on at the full marginal rate, putting it into super and claiming the deduction will be beneficial. If you have sold an asset, you will often need to pay capital gains tax on it. In these situations, you can place the money into your super and then claim the tax deduction. This will often reduce or completely eliminate the capital gains tax owed.

What Do You Need To Claim The Deduction?

There are a few things that you need to have and do if you would like to claim this tax deduction.  The first to do is make your contribution to your super. It is important to remember that you cannot contribute more than $25,000 per annum or there will be penalties.

The business owners at Peak Performance Massage have experience finding super based deductions, they explain it pays to be prepared, “all of the paperwork for your contribution will need to be on hand when you complete your tax return. The written acknowledgement from your fund is important and confirms your intent to claim as well as the amount you can claim. You generally have until 31 October to file your tax returns for the last financial year. If you work with a registered tax agent, you may have more time than this.”

Are There Other Points To Keep In Mind?


  • Your Age

While anyone who is able to contribute to a super is able to claim a tax deduction, others over the age of 65 will need to meet a work test.  This has to be met before and voluntary super contributions can be made. To pass this test, they will need to be in gainful employment for at least 40 hours over 30 consecutive days during the financial year of the claim.  For those who are under the age of 18, the deduction can only be claimed if they have earned their income as an employee or a business owner.

  • Contribution Limits

If you are going to claim the deduction, the contribution you made will count toward the concessional contributions cap. This is set at $25,000 per annum and penalties will be applied if you exceed this. It is important to note that your cap may be higher than this if you are eligible to use any unused cap amounts carried forward from previous years.

These personal tax-deductible contributions are not the only ones that will count toward your cap. Some of the other contributions that count including:

  • Compulsory contributions by your employer via the Superannuation Guarantee
  • Contributions from other jobs held during the financial year
  • Salary sacrifice contributions
  • Notional taxed contributions when you are a member of a defined benefit fund
  • Other contribution incentives.

With a helpful reminder, the family and financial legal team at Southern Coast Lawyers added, “any contributions that you claim the deduction on will not be eligible for super co-contribution from the government. It is also important to note that downsizing contributions will not be tax-deductible.” 

When You Access Your Super

The government has set rules about when you are able to access your super. You generally will not be able to access the funds until you have reached the preservation age and retire. This age will vary depending on when you were born.

Remember, the value of your super investment will fluctuate so you should always be aware of alternate ways to improve your financial wellbeing. Before you make any additional contributions, you need to understand the risks and be comfortable with them.

Author Bio

Angelica Hermann is a passionate freelance writer based in Sydney. She is a university student and philosopher major. Angelica loves to travel and in her free time enjoys being a tourist in her own city. Passionate about animals, Angelica loves all creatures great and small.


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