Post the 1st July 2017 there have been changes that now allow an employee to make a contribution to their superannuation fund & claim a tax deduction for it! 

This is referred to as a member concessional contribution.

Hence removing the need to engage in the over-complicated system of salary sacrificing to superannuation via your employer.

Prior to the 1st July 2017 ONLY those individuals who satisfied the 10% rule, that is less than 10% of your assessable income was from wages, were able to make a tax deductible super contribution.

It should be noted though that this opportunity does not come without its own limits and rules!

In the 2018/19 financial year the individual concessional contribution cap is $25,000.  The concessional contribution cap includes:

  • Employer SGC contributions
  • Salary Sacrifice contributions, &
  • Member Concessional Contributions

There are also age restrictions that apply:

Under 65

All contributions can be accepted

Age 65 to 75 year old

A member must satisfy the work test prior to making a contribution (excluding mandated contributions)

Over 75

ONLY mandated contributions

It is also important to carefully watch the timing of contributions.  Remember the financial year that the Superannuation Fund receipts the contribution will be the year to which it relates.  With the introduction of clearinghouses this can take up to a week so remember to process your contribution in plenty of time.

Written by Jackie Downing, for further details contact us at CS or your superannuation provider.