In order to obtain a deduction in the 2022 financial year, the concessional superannuation contribution must be received by your superannuation fund by 30 June 2022
The maximum concessional superannuation contribution limit is $27,500 for all individuals. Note that employer super guarantee contributions and salary sacrifice contributions are included in the cap.
Where a concessional contribution is made which exceeds these amounts, the excess is taxed at your marginal rate, less a 15% tax offset for the tax already paid by the super fund on the excess contribution.
If you are making a personal superannuation contribution, ensure you obtain the relevant documentation from your superannuation fund to substantiate claiming the deduction before lodging your 2022 tax return.
Other important superannuation issues in the lead up to 30 June 2022
Carry-forward concessional super contributions
From 1 July 2019, you can make ‘carry-forward’ concessional super contributions if you have a total superannuation balance of less than $500,000 at the end of the previous year. The unused concessional contributions caps can be used on a rolling basis for five years upon which they will expire.
For example, if a person had $20,000 in concessional contributions made on their behalf during the 2020-21 year, the $5,000 balance carries forward to the 2021-22 year.
This means the person can make concessional contributions of up to $32,500 this financial year without breaching the contributions cap if their super balance was less than $500,000 at 30 June 2021.
Super contributions made by cheque or electronic funds transfer (EFT)
Care needs to be taken where last minute contributions are made by cheque or electronic fund transfer to ensure that the deduction can be claimed in the current financial year.
Where the super contribution is made by cheque and the fund receives it by 30 June 2022, the deduction is allowed in the current financial year so long as the trustee banks the cheque within 3 business days and the cheque is not subsequently dishonoured.
Where the contribution is by EFT, it is taken to be made when the amount is “credited” to the bank account of the fund and not when the transfer is made.
Unless the contribution is made between linked accounts of the contributor and the fund (held at the same bank), the deduction may be deferred to the next financial year where the funds are not credited to the super fund account by 30 June 2022.
Super contributions made to the government’s small business superannuation clearing house (SBSCH)
To ensure a deduction can be claimed for employee super guarantee contributions in the 2022 year, the ATO says that due to processing time delays, payments need to be accepted by the SBSCH by 23 June 2022.
Contact KMT accountants now if you need assistance with your concessional superannuation contribution!
This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek tax advice from a qualified accountant at KMT Partners. Information is current at the date of issue and may change.