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Maximising your deduction for employee superannuation

 This week, we’re talking Employee Superannuation as part of our special End of Financial Year Catalyst Plus TV series and how you can maximise your business deduction this financial year.

We look into:

  • When is Superannuation deducted on your business tax return?
  • How to maximise your deduction
  • Why it is important to make your payment prior to 30 June (despite the due date 28 July)?
  • What if you don’t have the available cashflow to pay early?

When is superannuation deducted on your business tax return?

Despite popular belief, superannuation is deducted on your business tax return when paid rather than when incurred.

The 30 June quarter employee superannuation is due on the 28th July, however, payments of super post 1 July will cause that super payment to be deducted in the following tax year, rather than the current financial year.

This is because superannuation payments are deductible in the year that they are paid

How to maximise your deduction

A simple way to increase your taxable deductions for the current financial year is to pay your employee’s superannuation prior to 30 June.

If you’re using the ATO’s Small Business Clearing House, they are requesting you make superannuation payments by the 21st June. 

Otherwise, you’ll need to check with your Superannuation Clearing House if they have a similar “cut-off” date.

Why is it important to pay super prior to 30 June?

Paying superannuation prior to 30 June will maximise your deduction for the financial year. This is especially important if you are making a taxable profit. 

To be clear – you’ll still get the tax deduction if you don’t pay this quarter’s balance before 30 June but pay it by the ‘due date’ 28 July, the only difference is that the amount will be deducted in the following financial year. 

What if you don’t have the available cashflow to pay your employee Super early?

Don’t stress.

You still have until the due date 28th July to make the payment. You just need to understand that the deduction will occur next financial year. 

Next steps:

If you’re unsure if you should pay your superannuation early, please give your tax accountant call for advice specific to your needs.

Alternatively, you can get hold of us here: {{cta(‘915bdf0e-bcb3-4053-a6a5-87c201feab32’)}}

If this was helpful to you, or you know somebody who it can, please share on social media or by email.

Have a great week, and we’ll see you in next week’s episode of Catalyst Plus TV!

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