Super contribution deductions and the EOFY

The end of the 2020-21 financial year is nearly here, which should also serve as a reminder about getting a tax deduction in the current financial year for superannuation contributions.

Generally, to get a tax deduction for a superannuation contribution for an employee, the superannuation fund must have received the payment by 30 June.  Merely making the payment before 1 July will not guarantee that this has happened.

If an employer wants to get a tax deduction for the contributions, make sure employees are paid well before 1 July 2021 so there is time for the money to be received by your employees’ superannuation funds.  Otherwise, the deduction will have to be claimed in the year ending 30 June 2022.

There is a slightly different position if an employer uses the ATO’s Small Business Superannuation Clearing House (SBSCH).   If an employer makes the superannuation contributions to the SBSCH on or before close of business on 30 June, the ATO will consider that the payment has been received by the employees’ superannuation funds and the employer will get a tax deduction.  Note that this concession only applies to the SBSCH and not other clearing houses.

Also, please remember that the super contribution rate increases to 10% from 1 July 2021.  Payments of wages on or after this date will be subject to this superannuation contribution rate, even if some of the wages have been earned in the current financial year.

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