Claiming tax deductions for adding money to super
If you were working for someone else, your super contributions would be paid by your employer. When you’re running your own business, it's up to you whether you add to your super.
If you're under 65, or between 65-70 and meet the work test, you can chose to make extra contributions to your super directly from your bank account. You can then claim a tax deduction of up to $25,000 per year, which is called a concessional contribution. You can make additional contributions up to $100,000 per year, but this is not tax-deductible. This is called a non-concessional contribution. Depending on the value of your existing super balance, you may also be able to bring forward up to an additional two more years of non-concessional contributions, meaning you may be able to contribute up to $300,000 in a year if you meet the eligibility criteria.
To claim a tax deduction for any concessional personal contributions, you’ll need to notify your super fund that you plan to claim a tax deduction before you lodge your income tax return. It's in your tax return that you’ll make the claim for a tax deduction for any concessional contributions to your super.
See if you're eligible for extra super from the government
The Australian Government makes a co-contribution to help low and middle-income earners to boost their retirement savings. This co-contribution can help now, too, so it’s worth checking if you’re eligible for extra government contributions to your super while you’re growing your business.
If you have a yearly income of less than $52,697 (before-tax), and you meet the eligibility criteria, the Government will match 50 cents for every $1 that you add to your super from your after-tax income up to a maximum. This could mean up to a $500 contribution from the government. The amount depends on your income. This co-contribution gets paid directly into your super account after you’ve lodged your tax return for that year.