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Personal deductible contributions

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Add to your super and get a tax deduction by making personal deductible contributions.

How does it work?

If you have surplus cashflow or savings, you may want to make an after-tax super contribution and claim a tax deduction to reduce your taxable income.

May be suitable if…

You’re employed, self-employed or earn taxable income from other sources (such as investments).

What are the benefits?

  • Grow your super.
  • Pay less tax: the contributions are generally taxed at up to 15%¹, instead of your marginal tax rate up to a maximum of 47%².

Case study

Bob is 55 years of age and earns $80,000 p.a., so his marginal tax rate is 34.5%2. He’s paid off his mortgage and plans to retire in 10 years – so he wants to contribute more to his super.

He makes a personal super contribution of $10,000 and claims the amount as a tax deduction – reducing his taxable income. This means he pays $3,450 less tax in his tax return. Meanwhile, tax of 15% ($1,500) is deducted from the contribution in the fund.

By using this strategy, Bob increases his super balance and makes a net tax saving of $1,950 (that is, $3,450 less the $1,500 tax he paid within his super fund).

Important things to consider

  • Personal deductible contributions count towards your concessional contributions cap and penalties may apply if the cap is exceeded.
  • To claim the super contribution as a tax deduction, you need to submit a valid Notice of Intent form with your super fund, and receive an acknowledgement from them, before you complete your tax return, start a retirement income stream or withdraw or rollover the money.
  • If you’re an employee, another way to boost your super tax-effectively is to make salary sacrifice contributions.
  • You can’t access your super until you meet a condition of release such as reaching preservation age and retiring.
  • Other eligibility conditions apply – see the Australian Tax Office (ATO) website for more information.

1. Individuals with income above $250,000 in 2019/20 will pay an additional 15% tax on personal deductible and other concessional super contributions within the cap.

2. Includes Medicare levy.

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General advice and information only

Any advice and information on this website is general only, and has been prepared without taking into account your particular circumstances and needs. Before acting on any advice on this website you should assess or seek advice on whether it is appropriate for your needs, financial situation and investment objectives.

Tax disclaimer

Any general tax information on this website is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.