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Articles
Year End Superannuation Contributions

2010 Checklist - Company, Trust or Partnership Tax Return

2010 Checklist - Superannuation Funds Tax Return

2010 Checklist - Individual Tax Return

Pension Payment Minimums for 2010/11
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Bank Fees Dropping
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Personal Credit Ratings – Part 2
Henry Report
Income Tax Assessment Process Still Struggling
Australian Taxation Office (ATO) Backlog in Processing Tax Returns
End of Tax Payment Concessions
Fringe Benefits Tax and Odometer Readings
Changes to Special Disability Trusts
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Super Concessional Contributions Cap Has Been Reduced
Year End Superannuation Contributions
As 30 June deadline looms, a reminder of the rules for deductible superannuation contributions is useful.

The timing of the deduction for superannuation is interpreted very strictly by the Australian Taxation Office and focuses on the interpretation of paid.  We all know that there is a quarterly obligation for superannuation guarantee contributions of 9% of employee’s salaries, which typically is paid 28 days after the end of each quarter, often by electronic fund transfers.

 

It has been understood for many years that the contribution made in July is not claimable for tax purposes in the previous financial year.  What is new is the Australian Taxation Office interpretation that an EFT transfer, if made on 30th June and debited to the tax payers bank account, but not credited to the superannuation fund account until a day or two later, is not deductible.

 

This is a highly contentious opinion.  However, why have an argument with the Australian Taxation Office over a highly technical issue.  Make sure the superannuation fund receipts your contribution it in the same year, by paying a couple of days earlier.

 

In a different scenario, if the superannuation fund receives a payment by cheque on 30th June and fails to bank it for several days, then a deduction would not be allowed.  If they bank it promptly, then a deduction will be allowed.  To be safe in those circumstances make sure you pay it early or have some proof that the cheque has been received by the super fund – i.e. a courier.

 

A contribution can be made by a number of payments or EFT’s and it would be quite in order to make an early estimate of the superannuation payable and pay that mid-June, with the balance made up when the precise amounts are known.  Therefore, it is possible to meet the Australian Taxation Office’s interpretation of the rules quite strictly and obtain a deduction for the majority of the contribution.



25th-June-2010