Your employer can claim a tax deduction on any concessional contributions they make on your behalf, which includes the superannuation guarantee contribution and any salary sacrifice contributions.
An individual can claim a tax deduction for further personal concessional contributions to superannuation provided they do not exceed the total concessional cap limit of $27,500 after any employer contributions have been factored in. Carry-forward provisions that apply from 1 July 2018 mean that any unused portions of the annual concessional contribution cap can now be carried forward for up to five years as long as the total superannuation balance does not exceed $500,000.
You may be eligible to claim a tax deduction for personal superannuation contributions if you are under 67 years old. A tax deduction may also be made for those aged 67-75* if they meet the work test (i.e. having worked at least 40 hours during a consecutive 30-day period during the relevant financial year).
*For eligibility to a tax deduction, the contribution must be before the 28th day of the month following the month in which a member turns 75.
Please note: From 1 July 2019, people aged 67 to 74 with a total superannuation balance below $300,000 will be able to make voluntary contributions for 12 months in the first year after they last met the work test. However, existing annual concessional and non-concessional contribution cap limits will continue to apply to the contributions permitted by the exemption.
On the following page, let’s look at the example of Judy. She earns $60,000 a year in income (split between work and other income sources).
How much tax would she save if she makes a personal concessional contribution to super of $20,000?