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  • Salary, wages and super

    You can generally claim a deduction for salaries and wages you pay to your workers and for super contributions you make for them.

    If you are a sole trader, you can usually claim a deduction for your own super contributions in your personal tax return.

    Salaries and wages

    Deductions are calculated based on the type of business you operate:

    • If you operate your business as a company or trust, your company or trust can generally claim a deduction for any salaries and wages the company or trust pays to you or other workers.
    • If you operate your business as a partnership, the partnership cannot pay you salary or wages as you are a partner, not an employee. Any nominal payment of a salary or wages to a partner is usually a distribution of profit.
    • If you operate as a sole trader, you are the business owner and not an employee of your business, and therefore cannot pay yourself a salary or wage. Any nominal payment of a salary or wage to you is usually a distribution of profit.
    • If you engage a contractor to complete a service for your business, you may be able to claim the amount you pay them as a deduction.

    If your income includes personal services income (PSI), the amount you can claim for payments you make to an associate may be limited.

    See also:

    Super

    You can claim a deduction for super contributions you make to a complying super fund or retirement savings account for your employees and for certain contractors.

    The amount you can claim may be limited if your income includes personal services income (PSI).

    If you're a sole trader, you may be able to claim a deduction for your personal super contributions. However, you will not be able to claim a deduction if, during the year, you earned more than 10% of your total income from salary or wages.

    See also:

    Last modified: 08 May 2018QC 33728