Tax Deductions

You can make a full tax deduction for super payments you make for employees under the age of 75, provided the contribution is made to a super fund to provide superannuation benefits for an employee.

You can make a full tax deduction for super payments you make for employees before they reach age 75, provided you make the contribution on or before 28 days after the end of the month in which the employee turns 75 or in compliance with industrial law.

All tax deductions apply for the financial year in which you made the contribution.

You can claim a full tax deduction for super payments you make for employees aged over 75 years that you have been required to make by an industrial award, determination or national agreement preserving State awards. In that case, you are allowed a deduction for the contribution amount that is required by the industrial award, determination or national agreement preserving State awards.

Salary sacrifice contributions are also a deduction for your business, provided you have a written agreement in place with each employee making salary sacrifice contributions to super.

Your staff are subject to a $25,000 concessional contributions cap (or $50,000 if they are aged 50 or over) during the financial year 2009-10. This cap includes employer contributions and salary sacrifice contributions.

If your staff exceed the cap, the excess contributions will be taxed at the highest marginal tax rate of 46.5% (including Medicare levy). The excess portion of the contribution will be counted towards your employee’s non-concessional contribution cap. For 2009-10, your staff are subjected to a $150,000 non-concessional contribution cap per year. If your staff are under age 65, they can bring forward two years of contributions, allowing a limit of up to $450,000 over a three-year period.