It is fast approaching 30 June 2024.
To ensure that you can claim a tax deduction for your superannuation contribution, the superannuation fund must receive the contribution before 30 June 2024. With most tax-deductible expenses, you can claim your tax deduction in the year that the tax-deductible expense was paid. However, superannuation contributions are different; they are when the contribution is received by your superannuation fund.
What to watch out for:
1. Some APRA funds will have a cut-off date for superannuation contributions.
That cut-off date is generally around the middle of June. (APRA funds are generally Industry, Retail, and Public Sector Funds). Therefore, if the contribution is not received by the cut-off date, say the cutoff date to the fund is 15 June 2024, then you will be ineligible to claim a tax deduction for the payment made to the superfund after 15 June 2024.
Many individuals get caught by the cut-off date, and they wrongly assume that if they contribute before 30 June 2024, it will automatically become tax deductible.
2. Employer contribution.
Legally, employer contributions accumulated by 30 June 2024 do not need to be paid until the lodgement and payment of the 4th quarter BAS. The company needs to lodge and pay the BAS by 28 July 2024. Again, if the company wants to claim a tax deduction in this 2024 financial year, payment and receipt by the superannuation fund need to be prior to 30 June 2024.
3. Do you have a self-managed superannuation fund?
This year, 30 June falls on a Sunday. A contribution received and credited to your superannuation fund on 1 July 2024 will be ineligible for a tax deduction in the 2024 financial year.
Transfers between bank accounts with the same bank generally happen instantaneously, but not always. However, a transfer between different banks will normally have a difference in the transfer out date and the transfer in date within the superannuation fund.
4. ATO’s Small Business Superannuation Clearing House (SBSCH)
Another scenario to watch out for is when an employer is contributing to an employee’s SMSF using the ATO’s Small Business Superannuation Clearing House (SBSCH). The ATO recently provided an update about changes to the SBSCH process around obtaining bank account validations for SMSFs. This is a timely reminder for clients using the SBSCH service to check the bank details of their SMSF are up to date and correctly recorded by the ATO, otherwise payments may be rejected.
It is also worth noting that payments by employers to a clearing house generally do not constitute the receipt of a contribution by a super fund. A contribution cannot be recorded by the superannuation fund until it is received. Last-minute 2023-24 employer superannuation payments to top up an employee’s super may not reach the fund in time to be recorded as a contribution in 2023-24. They may end up being recorded in the 2024/25 financial year.
Should you require further information in relation to the timing of superannuation contributions, please feel free to contact Peter Quinn by submitting an enquiry or calling us on +61 2 9580 9166 to book an obligation free appointment.
The information in this document does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.