Superannuation Pre-Tax Contribution Question

kaleidoscope on 25/06/2024 - 11:08
Last edited 26/06/2024 - 11:59 by 1 other user

G'day, what is the correct method for contributing pretax funds into a superannuation account?

Premise:
I occasionally work on side projects and have an ABN account that generates irregular income. Due to the sporadic nature of this income, I do not have a regular payroll system in place to pay myself a salary or make regular superannuation contributions. I would like to contribute to my superannuation from any profits after expenses. These contributions are from pretax funds and need to be taxed at 15%.

To make contributions to superannuation, you can do so through the super fund (member, spin/usi), which requires a payroll system, or via BPAY. However, BPAY contributions are assumed to be non-concessional and are not taxed. If the contribution needs to be concessional, the super fund must be informed so that they can tax it at 15% and notify the ATO about the deduction (which is not correct as I'm not claiming a deduction, given it's from pre tax funds)

Hope the question is clear. TIA

—— Update ——

I managed to follow up on what @netjock mentioned and checked with my super account's help desk. They said as the funds from ABN account belong to a pty ltd, it's best to setup a clearing house and make contributions through there. So you can either do it through ATO's clearinghouse or as I am with Australian Super they have their own which is QuickSuper. It does require setting up an employer account with them. ATO's clearing house advertises as no fees involved while quick super is also no fees except for special circumstances which does not affect me. I will be looking into quicksuper for now.

Financial Superannuation

Comments

  • sumyungguy on 25/06/2024 - 11:12
    +4

    If it's within your concessional cap, contribute from post-tax funds and you'll get the difference back via your tax return.

    • kaleidoscope on 25/06/2024 - 11:32

      Yes it is within concessional cap. So you're suggesting I pay myself e.g. $4000 from ABN account to my personal account, and then send through that $4000 into my super account from the personal account? (the said abn account has no attachment to my tfn for personal tax purposes)

      • sumyungguy on 25/06/2024 - 12:07
        +1

        I'm far from a tax expert and only operate as a sole trader. Regret I can't advise on then business account vs personal account question.

      • dtc on 25/06/2024 - 14:23
        +2

        It doesnt really matter where the money comes from. If its paid direct from the ABN account to your super fund, then in the books that counts as a payment to you and you declare it as income. Or you can 'physically' move the money from the company to you to the super fund. Same result.

        Your super fund (when you log on online) will have an account for you to lodge contributions, one will be concessional and one will be non concessional. Lodge it into the non concessional one and then submit a notice of intent to claim as concessional after 1 July and before you lodge your tax return. Then it all matches up and you get a tax deduction/refund.

  • Duckie2hh on 25/06/2024 - 11:15
    +7

    Might be too late to go through the post tax route (claim it to be concessional).

    PS: Generally, just pay BPAY into super from post tax route, then submit a "Notice of intent to claim a deduction" through your superfund.

    • sumyungguy on 25/06/2024 - 11:26
      +2

      I think there's still time to lodge the Notice of Intent but I gather some funds are applying a 28-Jun processing cutoff. OP will need to consult his super fund.

    • kaleidoscope on 25/06/2024 - 11:28

      Thanks. Not really rushing for this year though, just looking for a proper practice going forwards.

      I do follow the usual bpay routine when I make any personal contributions from my personal account.
      As this is from an abn account that is not considered income for personal tax it needs to be done in a different way from my understanding. (I can transfer from abn to my personal account, and then make bpay from personal account, which is bit of a hassle tbh)

      • Duckie2hh on 25/06/2024 - 11:57
        +1

        Yeh I am sure there is a proper way, which I am not familiar with. Good luck OP.

      • kiitos on 26/06/2024 - 08:24
        +1

        What business structure do you have? Are you a sole trader?

        • kaleidoscope on 26/06/2024 - 12:04

          Not sole trader, its pty structure.

      • SlickMick on 26/06/2024 - 10:09
        +1

        I'm not sure whether you're trying to salary-sacrifice from your "employer", but it's really unnecessary. The ATO have made it easy now by simply notifying the super fund to deduct the 15%, and on your tax return you specify that you want to claim a personal super deduction.

    • JimB on 25/06/2024 - 12:04
      +2

      Not too late.

      As long as you lodge the Notice of intent to claim a deduction with your superfund before you lodge your tax return or the end of the following financial year.

  • Jake D on 25/06/2024 - 11:16

    Change super funds?

    • kaleidoscope on 25/06/2024 - 11:23

      How is that going to help though? both me & mrs are with different super funds and they both have similar structure in place for contributions.

      • SlickMick on 26/06/2024 - 10:11
        +1

        Not sure what Jake D was getting at, but changnig to a SMSF means you're just sending notifications to yourself. Though the SMSF is audited, so you still need everything in order.

        • MITM on 30/06/2024 - 08:15

          Don’t do this for $4000

  • uncompressed on 25/06/2024 - 14:04

    Your superfund should have details for a personal contribution BSB/ACC number which you use to put in funds.

    You will also need to file a notice of intent to claim and get an acknowledgment from the fund before you file your tax return.

  • netjock on 25/06/2024 - 14:14
    +2

    Try sending it through the ATO clearing house for next year. https://www.ato.gov.au/businesses-and-organisations/super-fo…

    Might be too late for this year to get it up and running.

    • kaleidoscope on 25/06/2024 - 14:22

      This looks like the way to go. Thank you!

      • SlickMick on 26/06/2024 - 10:14

        I don't think it is. That is for if you havr yo pay others.
        It will surely be more work than submitting a notice to claim, then claiming as a deduction.

        • kaleidoscope on 26/06/2024 - 11:48

          I don't think it is. That is for if you havr yo pay others

          Hmm. The ABN account is not personal and is a pty, so anyone including myself is considered "others" as it is a separate entity for tax purposes (afaik).

          • SlickMick on 26/06/2024 - 12:32

            @kaleidoscope:

            havr yo
            wow my fingers were straying a bit there

            What are you trying to achieve? Have the company meet it's super guarantee responsibility? Get some kind of business deduction?

            If your only goal is to make deductable contributions, your trying to find a complex solution to a simple problem.

  • parsimonious one on 25/06/2024 - 18:30

    Pay the contribution via your funds suggest route (eg bpay)

    Then submit notice of intent to claim. This can often be done electronically via your funds app or website

  • TheAccountant88 on 26/06/2024 - 21:17
    +1

    ATO's clearing house is the easiest way and is straight forward from experience.

  • MITM on 30/06/2024 - 08:22

    You write an invoice to your PTY LtTD. P/L pays the expense. You declare as income. You pay into Superfund. You submit Notice of Intent to Superfund . You claim deduction.
    P/L claims the expense.

  • divs on 21/07/2024 - 13:36

    1QuickSuper is a registered trademark and a product owned and operated by Westpac Banking Corporation ABN 33 007 457 141. Westpac’s terms and conditions applicable to the QuickSuper service are available after your eligibility for the free clearing house service is assessed by AustralianSuper. A Product Disclosure Statement (PDS) is available from Westpac upon request. AustralianSuper doesn’t accept liability for any loss or damage caused by use of the QuickSuper service and doesn’t receive any commissions from Westpac if employers use this service. You can choose to make your contributions using a different service, but it needs to meet the government’s minimum data standards, visit ato.gov.au

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