You will generally be able to claim a full tax deduction for contributions to superannuation, subject to certain restrictions (please refer to your tax adviser). These contributions are called concessional contributions.
However, total concessional contributions over $25,000 in a year will result in excess contributions tax of 30 per cent plus Medicare levy, in addition to the standard contributions tax of 15 per cent. A cap of $25,000 a year generally applies to concessional contributions (i.,e. employer and salary sacrifice contributions). The concessional contributions cap for the 2013/14 year (1 July 2013 to 30 June 2014) is $25,000 for those under 60 and $35,000 for those over 60. The Government has announced that from 1 July 2014 the contributions cap will be increased to $35,000 for all persons over 50 whilst remaining at $25,000 for those under 50.
You will be able to contribute until you reach 75 years of age and generally be entitled to a full tax deduction on those contributions, as above.
In order to claim the tax deduction as a self-employed person, there is a requirement that less than 10 per cent of your assessable income, reportable fringe benefits and income which is salary sacrificed into superannuation, is attributable to employment as an employee.
You could also be entitled to the government co-contribution as a self-employed person making your own contributions from tax paid dollars, referred to as non-concessional contributions.
Under the co-contribution scheme, the government contributes $0.50 for each $1 you contribute to super from your after-tax pay to a maximum of $500.00 in a year. To get the full co-contribution amount you must contribute $500 of your money into the fund and your income must be less than $33,516 (2013/2014) a year. The co-contribution is payable at reduced rates if your income is between $33,516 and $48,516 in a year. It cuts out at $48,516. To be entitled to the co-contribution you must be less than 71 years old at the end of the income year in which you make the personal superannuation contribution.
Choosing an Industry SuperFund for your self-employed super will mean you benefit from low fees and no commissions. You can also take advantage of value-for-money life, disability and income protection insurance using an Industry SuperFund.
Based on the updated thresholds for 2013/2014 financial year.