You can boost your super by adding your own contributions to your super fund. Personal super contributions are the amounts you contribute to your super fund from your after-tax income (that is, from your take-home pay).
These contributions:
- are in addition to any compulsory super contributions your employer makes on your behalf
- do not include super contributions made through a salary-sacrifice
arrangement.
Personal contributions are non-concessional (after-tax) contributions and will count towards your non-concessional contributions cap unless you have claimed a tax deduction for them.
You can’t claim a deduction for superannuation contributions paid by your employer directly to your super fund from your before-tax income such as:
- the compulsory super guarantee
- Salary sacrificing super amounts
- Reportable employer super contributions
You may be able to claim a tax deduction for personal super contributions that you made to your super fund from your after-tax income, for example, from your bank account directly to your super fund. Before you can claim a deduction for your personal super contributions, you must give your super fund a Notice of intent to claim or vary a deduction for personal contributions form (NAT 71121) and receive an acknowledgement from your fund. There are other eligibility criteria that you must meet.
People eligible to claim a deduction for personal contributions include people who get their income from:
- salary and wages
- a personal business (for example, people who are self-employed contractors, or freelancers)
- investments (including interest, dividends, rent and capital gains)
- government pensions or allowances
- super
- partnership or trust distributions
- a foreign source.
The personal super contributions that you claim as a deduction will count towards your concessional contributions cap. When deciding whether to claim a deduction for super contributions, you should consider the super impacts that may arise from this, including whether:
- you will exceed your contribution caps
- Division 293 tax applies to you
- you wish to split your contributions with your spouse
- it will affect your super co-contribution eligibility.
If you exceed your cap, you will have to pay extra tax and any excess concessional contributions will count towards your non-concessional contributions cap.
When all feels overcomplicated, you can always hire a specialist. Our team of financial advisers and accountants will be happy to sort everything out for you. Contact us today.
Information source www.ato.gov.au
