You might not be aware that you can claim personal super contributions back on your tax return. The majority of Australians understand that super is money for retirement. However, what is much less well known is that you don’t solely have to rely on your bosses’ contributions to grow your super savings. Better still, money you add to super from your own pocket (post-tax) can be tax deductible.

A personal super contribution can be best described as a contribution you make to your super fund ‘after-tax’. This should not be confused with pre-tax contributions your employer makes or that your salary sacrifices into your fund.

Previously an Australian needed to be self-employed to claim personal super contributions on tax. However, on 1st July 2017, changes were made allowing workers to claim a tax deduction for personal contributions even if you are a salary employee. However, there are a few important things to keep in mind.

Making a tax-deductible contribution to your fund is very simple. You can do it as a bill payment from your everyday bank account. Check you have the right BPAY details for your fund, and allow a few days before the 30th June for the money to reach your super account.

Another easy option is to speak with your employer and ask them to do it for you. Similar to a salary sacrifice arrangement where an employer pays an extra amount of your pre-tax income to your super, many will do the same with post-tax income.

The important thing to keep in mind is that the contributions must be post-tax if you want to claim them as a deduction on your return.

There are two crucial steps to claim a personal super contribution on your tax return:

  • Get in touch with your super fund and tell them you want to claim a deduction for your personal superannuation contributions.
  • Make sure you get a reply from them prior to lodging your tax return.

Once you hear back from them you can lodge your return. At item D12, Personal Superannuation Contributions, you enter the amount you wish to claim as a deduction on your return.

It is important to understand that there are limits to how much super you can claim via this method.

In the ATO’s viewpoint, the above process effectively converts an ‘after-tax’ super contribution to a ‘before tax’ super contribution. This is important to note.

A maximum of $25,000 can be added to your super each year in ‘before-tax’ or concessional contributions before a higher tax rate applies. They usually include:

  • Your employers’ mandatory contributions (a minimum 9.5 percent of your salary), and
  • Your pre-tax or salary sacrifice contributions.

This also includes any after-tax contributions you intend to claim a deduction on.

As an example, if your boss has already paid $20,000 into your super, you can claim up to $5,000 in personal contributions in the current financial year.

Furthermore, if your boss uses the new single touch payroll system, you can see how much has been added to your super at any stage.

You are also required to meet a work test if you’re aged 65 to 74 years old. That means working at least 40 hours in a consecutive 30-day period each financial year.