There's now more incentive to boost your super with improved tax breaks for the self-employed.
Tax Deductions
If you're self employed or don't have an employer contributing to your super, you could be eligible for a tax deduction on contributions you personally make to your super.
Eligibility
To be eligible you need to be in one of the following categories:
- you're self-employed or substantially self-employed (your assessable income, exempt income, and reportable fringe benefits from eligible employment is less than 10% of your total assessable income), or
- you do not receive (and are not entitled to) superannuation support from your employer (unsupported persons).
You also need to have made a personal contribution for this financial year.
I own a company. Am I eligible?
If you own a company, super contributions made by the company are treated as employer contributions, so will usually be eligible as tax deductions for the company. Check with your accountant or the ATO if you have further questions.
How do I claim the tax deduction?
If you intend to claim a tax deduction for self employed contributions, you'll need to notify us in writing by completing this ATO form and returning it to us.
How much can I contribute?
From 1 July 2007, there is no limit to the tax deduction you can claim on personal super contributions. However, any contributions over the current cap of $50,000 per year will be taxed at 31.5% in the fund (which includes the Medicare levy of 1.5%). If you're 50 or over, you get to contribute up to $100,000 before attracting this higher tax rate.
Contributions that you claim a deduction on will be subject to 15% Contributions Tax within the fund. Rollover payments are not deductible. If you're not sure about your tax circumstances, contact the Australian Tax Office (ATO).
Can the self employed claim the Government Co-contribution?
Yes, the good news is it's been extended to include the self-employed providing certain criteria are met:
- You earn at least 10% of your income from carrying on a business, eligible employment or a combination of both
- Your income is lower than the relevant threshold of $56,000
- You are less than 71 years of age at the end of the income year.
