Did you know...
You can still contribute into
your Accumulation account
if you are self-employed.
Jim Waldron
QSuper member since 1973
If you are self-employed and under age 75, you can pay further contributions into your Accumulation account to help finance your retirement lifestyle.
For super purposes, you are self-employed if you earn less than 10% of your annual assessable income from an employer. For example, a doctor may be substantially self-employed, but work one day a week in a hospital. If the income earned from the hospital is less than 10% of the doctor’s total annual income, a tax deduction can be claimed for personal contributions to super.
If you have established a private company (i.e. Pty Ltd) and earn income under the company name, you are considered to be an employee of the company (usually the director) rather than self-employed. In this case the company will claim the tax deduction, not the individual.
Can I claim a tax deduction for my personal contributions?
Self-employed and unemployed people can generally claim a full tax deduction for their personal contributions. (People who have an employer paying into super for them generally cannot claim a tax deduction for their own contributions.)
If you are self-employed or unemployed and already a QSuper member, you can contribute to your QSuper Accumulation account and claim a tax deduction. If you are not already a member, you can join if you have a spouse who is a QSuper member. To claim a tax deduction, certain conditions must be met. You may like to consult your accountant to decide whether claiming a tax deduction is right for you.
How much can I contribute?
There is no limit to the amount you can claim as a tax deduction, however there are limits on the amount receiving concessional tax treatment.
Concessional contributions can be contributed up to the concessional contributions cap. The current cap is $50,000 per year. However, transitional arrangements exist. For the period 1 July 2007 to 30 June 2012, concessional contributions up to $100,000 per year can be made if you are 50-years-old, or from when you turn 50 during this period.
Concessional contributions in excess of the concessional contributions cap will be taxed at an additional 31.5% (including Medicare levy of 1.5%). This tax will be imposed on the member, who will be able to withdraw an amount from their super equal to their tax liability.
Example
Sam is working two days a week for Education Queensland. Sam wants to claim a tax deduction for his contributions to QSuper. At the end of the financial year, when Sam has worked out his assessable income, he must make sure the income he has earned from his employer is less than 10% of his total assessable income.*
If this is the case, Sam can claim a full tax deduction for his contributions. If the income from his employer is more than 10% of his assessable income, no deduction can be claimed.
How do I claim a tax deduction?
Contact QSuper to obtain a Notice to the QSuper Board of Trustees form or complete the Section 290 declaration included on the QSuper Deposit form (pdf), which you send with your deposit. Once QSuper has received the declaration, it cannot be withdrawn, but you are able to reduce the amount you have nominated as tax deductible. This reduction must be made either at the time you lodge your tax return, or by the end of the financial year following the year the contribution was made, whichever is earlier.
QSuper is required to deduct 15% tax from any contributions for which you are claiming a tax deduction. These contributions may be taxed again when you take the money in cash, as they are concessional (before-tax) contributions. Your contributions and investment earnings must remain in super, generally until you retire after reaching your preservation age.