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Superannuation expenses

Last updated 31 August 2006

Did you make any superannuation contributions on behalf of eligible employees or their dependants as a business expense?

No, Go to Bad debts.

Yes, Read on.

You need to know

Show superannuation expenses for the year of income. Do not include any amount that was a contribution for yourself. The deduction for your own superannuation contributions must be claimed at item D13 on your tax return (supplementary section). See question D13 in TaxPack 2006 supplement.

Employers are entitled to a deduction for contributions made to a complying superannuation, provident, benefit or retirement fund or retirement savings account (RSA) where the contribution is to provide superannuation benefits for eligible employees or to provide benefits to the employee's dependants on the employee's death. Superannuation benefits mean individual personal benefits, pensions or retiring allowances. A deduction is allowable in the income year in which the contributions are made.

Contributions made to a non-complying fund:

  • are not allowable as a deduction, and
  • do not count towards superannuation guarantee obligations.

Under the superannuation guarantee an employer needs to provide a minimum level of superannuation for eligible employees or pay a tax called the superannuation guarantee charge to the Commissioner. The superannuation guarantee charge is not a superannuation contribution and is not tax deductible.

Contributions paid by an employer for eligible employees to a non-complying superannuation fund are fringe benefits - other than where the contributions are made for an exempt visitor - and may be subject to tax under the Fringe Benefits Tax Assessment Act 1986.

The amount of contributions that can be claimed as a deduction by an employer contributing to a resident complying superannuation fund or RSA in respect of eligible employees is limited by the age of each relevant employee.

Where an employee has reached the age of 70, there is a further restriction on the deduction that can be claimed for an employer contribution to a complying superannuation fund or RSA.

For the 2005-06 income year the age-based limits are as follows:

Table 1: Employee deduction limit

Age in years

Deduction limit

under 35


35 to 49


50 and over (see Note)

$100,587 (see Note)

Note: For contributions made after the 28th day of the month following the employee's 70th birthday, the deduction claimable is limited to the amount of the contribution required:

  1. under a federal, state or territory award, or
  2. to meet the employer's superannuation guarantee obligation on salary or wages paid to the employee before the employee's 70th birthday.

The employee's age limit is determined at the end of the day on which the employer, or associate of the employer, made the last contribution for the income year for the benefit of the employee.

Employer contributions paid to the Superannuation Holding Accounts Special Account (SHA special account) are allowable deductions up to a limit of $1,200 per employee.

Note: The SHA special account was closed to employer superannuation deposits on 30 June 2006.

Completing this item

Step 1, Write your total primary production superannuation contributions at Superannuation expenses in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

Step 2, Write your total non-primary production superannuation contributions at Superannuation expenses in the Non-primary production column. Do not show cents.

Step 3, Add up your primary production and non-primary production superannuation contributions and write the total at G.