• Salary, wages and super

    You can generally claim a deduction for salaries and wages you pay to employees, and for super contributions you make for them and for certain contractors.

    If you’re a sole trader or partner in a partnership, you can usually claim a deduction for your own super contributions in your personal tax return.

    Salaries and wages

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

    • If you operate your business as a company or trust, you can generally claim a deduction for any salaries and wages the company or trust pays to you or other employees.
    • 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, and therefore cannot pay yourself a salary or wages. Any nominal payment of a salary or wages to yourself is usually a distribution of profit. However, you can claim a deduction for the salaries and wages you pay to employees.

    If your income includes personal services income, 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.

    If you're a sole trader or a partner in a partnership, 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 employment.

    See also:

    Last modified: 13 Mar 2015QC 33728