The super guarantee (SG) contributions you make for your employees are tax-deductible — as long as you pay them on time. Here’s how you can claim the superannuation tax deduction.

 

How to claim the superannuation tax deduction

The timing of contributions is vital when claiming deductions. As a general rule, the super fund must receive the contributions:

  • before the due date to claim as a deduction and
  • by the close of business on 30 June 2022 to be tax-deductible in the 2021/2022 financial year.

If that’s the case, how much time is needed for a super fund to receive the contributions?

It depends on where you make the payment — in a commercial clearing house or ATO’s Small Business Superannuation Clearing House (SBSCH).

  • Commercial clearing house

If you pay via a commercial clearing house, the SG contribution will only be considered as paid on the date the super fund receives it and not on the date you made the payment. 

Whether you can claim the superannuation tax deduction depends on the amount of time it takes the contributions to reach the super fund. 

The processing time may differ from one clearing house to the next, so it’s best to ask your provider about their time frame for getting contributions to the super funds. 

Since this option takes time, it’s better to give yourself enough time for your super payment to be processed and received by the relevant due date.

 

  • Small Business Superannuation Clearing House

When you’re eligible to pay via the Small Business Superannuation Clearing House, you can meet your super obligations on the same date the clearing house accepts the payment. 

For example, if you pay the SG contribution before the close of business on 30 June, and even if the contribution has not yet been received by the super fund — as long as SBSCH has accepted it — you’re eligible to claim your superannuation tax deduction.

About SBSCH

The Small Business Superannuation Clearing House (SBSCH or ‘the clearing house’) is a free online service provided by the Australian Government through the ATO.

You can use this service if your business has either:

    • 19 or fewer employees, or
    • an annual aggregated turnover of less than $10 million.

When you’re eligible for this service, you can pay your employees’ contributions through a single payment. After this, SBSCH will distribute the money to each employee’s super fund based on your instructions.

 

Related: What Tax Deductions to Claim Before the End of the Financial Year

 

Compliance with SuperStream Requirements

The ATO requires all employers to comply with SuperStream.

According to Service NSW, SuperStream is the way you must pay contributions and send information to the super funds of your employees. It works by submitting payments electronically through a SuperStream compliant system. Both commercial clearing houses and the SBSCH are SuperStream compliant.

Aside from these two, the ATO also lists other electronic options where you can make payments and meet SuperStream requirements. You can view them here.

 

What if you missed the superannuation due date?

If you failed to make your employees’ super guarantee contributions by their due date, you may have the super guarantee charge (SGC) to the ATO. It is not tax-deductible, so we advise you to meet your obligations on time.

Read here for more information on missed and late super guarantee payments.

Read Next: End of Financial Year Checklist for Small Business Owners

Make sure you meet your tax obligations on time by working with an experienced accountant. Our tax accountants at ABJ Solutions and CMPartners have profound knowledge of Australian tax regulations. We can help you prepare your tax return, determine which tax deductions to claim and help you plan for the new financial year. If you have questions or clarifications about the process of claiming superannuation tax deductions, feel free to reach out to our friendly team.

You can also contact us today to learn more about our services.