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Reduce your tax with personal super contributions
If you've made a withdrawal from your account (for example, through a coronavirus early access claim), the amount you can claim as a tax deduction may be reduced. Find out more.
If you make voluntary contributions into your superannuation account from your after-tax income (also called non-concessional or personal contributions) – not only are you contributing towards the retirement lifestyle you want, you might also be eligible to claim a tax deduction. This could reduce the amount of income tax you pay and potentially put more money in your pocket at tax time.
You can claim a tax deduction for:
You cannot claim a tax deduction:
Although you made the contributions from your after-tax pay, by claiming a tax deduction your super fund will treat them as before-tax (concessional) contributions and they will be subject to 15% contributions tax. The benefit of claiming a tax deduction on your super contributions will depend on your marginal tax rate. If you earn more than $45,000 per year, claiming a deduction could be a tax-effective strategy.
Sam is a registered nurse and earns a salary of $80,000 per annum. During the year, Sam makes $10,000 in voluntary after-tax contributions to QSuper.
Sam lodges a ‘Notice of intent to claim a tax deduction for personal contributions’ with QSuper. Submitting this form means her fund now treats her after-tax contributions as before-tax. Sam has $1,500 (15%) of contributions tax deducted, making her contribution to super $8,500 net of tax.
Sam claims a tax deduction for $10,000 in her tax return, reducing her taxable income to $70,000 for the year (disregarding any other income and deductions). Sam’s marginal tax rate is 34.5% (including the 2% Medicare levy), which means that – after claiming the deduction – she pays $3,450 less in tax. While keeping in mind that $1,500 tax was deducted from Sam’s super contribution, she has added to her super and saved $1,950 in income tax.3
Once you claim a tax deduction, your contributions change from after-tax (non-concessional) to before-tax (concessional) and are part of your yearly $25,000 cap on before-tax contributions. Your employer and any salary sacrificed contributions also form part of this cap, so factor these in when working out how much of your after-tax contributions you want to claim a tax deduction for.
Keep in mind, if you claim a tax deduction on your voluntary after-tax contributions, they will be subject to 15% contributions tax which means less money will go into your retirement savings.
To be eligible to claim a tax deduction, you must:
Read our fact sheet (pdf) for more information about the eligibility requirements and consider talking to your tax accountant or financial adviser for professional advice. This is particularly important if you are approaching your before-tax (concessional) contribution cap for the year, or if you might be eligible for the Government's super co-contribution.
If you are eligible to claim a tax deduction, please notify QSuper in writing before you lodge your annual tax return. You have until the date you submit your tax return or the end of the following financial year in which the contributions were made (whichever is earlier), to claim your tax deduction.
To make a claim:
It is important to note that once we receive and acknowledge your valid notice of intent to claim a deduction, you cannot withdraw it but you can apply to reduce it by resubmitting the form. This needs to be done before you lodge your tax return or the end of the following financial year in which the contributions were made (whichever is earlier).
Download our Personal Contributions Guide (pdf) for more details.
Complete the form in Member Online.
1. Assumes a 30% tax rate, less 15% contributions tax for an average claim of $6,500 by QSuper members with an estimated average net member benefit of $977.
2. You cannot claim a tax deduction for standard member contributions made to a Defined Benefit account.
3. This case study for illustrative and educational purposes only, and the members shown are not real. Additionally, figures may be rounded for ease of understanding. Members should seek advice from a qualified licensed professional, regarding their own circumstances. $3,450 tax return is based of $10,000 in post-tax contributions multiplied by a marginal tax rate is 34.5% including 2% Medicare levy. Tax return does not take into account other income and deductions.
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