Boost your super with tax deductible contributions

While many of us receive regular superannuation guarantee (SG) contributions from our employer into our super account, making your own additional contributions now can save you on tax and give your super balance an extra boost.

One way to do this is to make personal contributions and claim a tax deduction in your tax return. Eligibility conditions apply, including a work test for people aged between 67 and 74 years.

We recommend speaking to a financial adviser before making additional contributions to your superannuation.

Why make personal deductible contributions?

Personal deductible contributions are taxed at 15% in the super fund, instead of at your marginal tax rate.

Example – Tax treatment of a personal deductible contribution

Marnie’s taxable income is $150,000. This means her marginal income tax rate is 37% plus 2% Medicare levy.

 

If she makes a personal contribution of $10,000 and claims a tax deduction for the full amount, she’ll only be taxed $1,500 of contributions tax (15%) instead of $3,900 of personal income tax (39%).

 

She’ll forgo $6,100 of after-tax money ($10,000 minus $3,900 personal income tax) but her super balance will be boosted by $8,500 (contribution net of contributions tax).

Concessional contributions

Making personal deductible contributions is one way you can make concessional contributions.

Concessional contributions also include contributions your employer makes, for example, under the Superannuation Guarantee.

You can also make concessional contributions under salary sacrifice – an agreement between you and your employer for you to receive less income in return for extra superannuation contributions.

These contributions are called ‘concessional’ because they’re taxed in the super fund at 15% instead of being taxed at your marginal rate.

Low income earners (those with adjusted taxable income1of $37,000 or less) may be eligible for a Low Income Superannuation Tax Offset which compensates them for this tax. High income earners (those with income2 plus concessional contributions of more than $250,000) may have to pay additional tax of up to 15% on their concessional contributions, known as Division 293 tax.

More about salary sacrifice contribution arrangements

If you work as an employee, ask your employer how to put in place a salary sacrifice arrangement. This may benefit people who like the convenience of having regular contributions deducted from employment income before receiving it. If you haven’t already set up a salary sacrifice arrangement, putting one in place by 1 July means you’ll reap the benefits over the full upcoming financial year. To learn more about salary sacrifice contribution arrangements, visit the ATO website or speak with your financial adviser or contact us if you don’t have a financial adviser.

Concessional contributions cap

Contribution caps help to keep the superannuation tax arrangements affordable for the government. The concessional contributions cap is an annual limit on the total amount of concessional contributions that you can make. In the 2023/24 financial year, this cap is $27,500. In the 2024/25 financial year, the cap will increase to $30,000 in line with indexation rules.

Making extra concessional contributions – carry forward rule

If you haven’t been contributing up to the annual cap in the past five financial years, you may be able to make extra concessional contributions in the current or a future financial year. To be eligible for this special carry forward rule, your total superannuation balance3 must be less than $500,000 at 30 June of the previous financial year (ie 30 June 2023 for the 2023/24 financial year). To learn more about how the carry forward rule works, visit the ATO website or speak with your financial adviser or contact us if you don’t have a financial adviser. You can check your available carry forward concessional contribution amounts by logging into ATO online services through your myGov account.

How to make concessional contributions

BPAY

Using BPAY® is one of the easiest ways to transfer large contributions into your account. To send funds to your account via BPAY, the financial institution holding the funds must be a BPAY payer. Using your online banking service, log into your account and make a payment to the details listed below. To make a payment into your account, you’ll need:

  • The biller code for the contribution type you intend to make, and
  • Your BPAY Reference Number.

The BPAY biller codes for Grow Wrap and Voyage are provided below:

Product Name

Personal

Spouse

Grow Wrap Super Service

423129

423145

Voyage Superannuation Master Trust

253658

253690

Please contact your financial adviser or contact us if you’re not sure which BPAY Reference Number applies to your account.

Please note, BPAY contributions take up to three business days to clear. The maximum amount you can contribute in one transaction via BPAY is $325,000.

Electronic funds transfer (EFT)

You can transfer funds into your account via electronic funds transfer (EFT) by using your financial institution’s online banking service.

Your financial adviser can create or amend a direct credit facility online, including your nominated contribution type for EFT contributions. You can only nominate one contribution type (personal or spouse) for EFT contributions, which will be used to classify all future contributions made using this method. If you don’t have a financial adviser, you can change the contribution type by contacting us.

Once the direct credit facility is set up, we’ll provide you with the details you need to make contributions.

Direct debits

Using the direct debit facility makes it easy to set up automatic regular contributions into your superannuation account from an external bank account in the same name. The minimum direct debit amount is $250 per transaction, which can be set up for a specific period or continued indefinitely. You have a choice of frequency – a one-off payment, monthly, quarterly, half-yearly or yearly.
 
To establish a direct debit for contributions into your superannuation account from a bank account, your financial adviser can provide you with and assist you to complete a Direct Debit Request form. If you don’t have a financial adviser, you can contact us and we’ll provide you the relevant form to complete. Please ensure that the form is signed by all account holders (not third party authorised signatories).

More information

To learn more about personal deductible contributions, visit the ATO website or speak with your financial adviser or contact us if you don’t have a financial adviser.

Additional Information

1. Adjusted taxable income is the sum of taxable income, adjusted fringe benefits total, target foreign income, total net investment losses, reportable super contributions, tax-free social security or DVA pension less child maintenance expenditure.

2. Income for Division 293 tax is equal to the sum of:

  • taxable income
    • less the taxable component of a superannuation lump sum which is taxed at 0 per cent (ie the amount within the low rate cap) and the assessable portion of a First Home Super Saver Scheme released amount
  • family trust distributions excluded from assessable income due to the payment of family trust distribution tax
  • reportable fringe benefits total, and
  • total net investment losses.

3. Total superannuation balance represents the value of all of your superannuation interests. For more information, visit the ATO website or speak with a financial advisor.

This information is issued by Oasis Fund Management Limited (Trustee) (ABN 38 106 045 050, RSE L0001755, AFSL 274331), OnePath Custodians Pty Limited (Trustee) (ABN 12 008 508 496, RSE L0000673, AFSL 238346) and IOOF Investment Services Ltd (Operator) (ABN 80 007 350 405, AFSL 230703). The Trustees and Operator are members of the IOOF group of companies comprising IOOF Holdings Ltd (ABN 49 100 103 722) (IOOF) and its related bodies corporate. IOOF, the Trustees, the Operator, and its related bodies corporate and associated entities do not guarantee the repayment of capital, the performance of, or any rate of return of an investment in the products issued by the Trustees and Operator. Such an investment is subject to investment risk and other risks, including delays in the repayment of capital and loss of income and principal invested. Past performance is not an indication of future performance.

The information provided is for the use of advisers only and is not to be given to potential or existing investors. The information is of a general nature and does not take into account an investor’s personal needs, financial circumstances or objectives. Before acting on this information, an investor must consider the appropriateness of the information, having regard to their needs, financial circumstances and objectives. Full product information including fees, charges, terms and conditions is available in the relevant PDS or IDPS Guide, available by calling Customer Services on 1800 893 141 or visiting wrapinvest.com.au/adviseronline

Account information and reports produced on this site relies on information provided to us from a number of sources and as such the Trustees and Operator make no representations as to the accuracy or completeness of this information and its suitability for your intended use. To the extent permitted by law, the Trustees and Operator do not accept any responsibility or liability arising from your use of this information.

The Wrap Cash Account and Wrap Invest Cash Account are issued by Macquarie Bank Limited (ABN 46 008 583 542 AFSL 237 502).

The information on this website is current as at the date of publication and may be subject to change. For further information, please contact Customer Services on 1800 893 141.