If you don’t need the cash generated from your small business, and you want to minimise your taxation liability you should consider contributing part of your profit into your superannuation fund.

Changes to the rule.

Prior to 1 July 2017 you were not entitled to claim a tax deduction for personal superannuation contributions where your income from employment services exceeded 10% of your total assessable income.

Say, John is an employee and earns $70,000 a year and he earns additional income from handyman services or other services of about $10,000 per annum. Under the previous rule if John wanted to contribute the $10,000 into super he would not be eligible for a tax deduction. He would need to pay $3,450 tax on the income of $10,000.

Under the new rule, effective from 1 July 2017, if John does not need the $10,000 to finance day to day living expenses, and chooses to make a $10,000 personal contribution to his superannuation fund, he will not be subject to any personal tax on the $10,000 in his personal Income tax return.

His superannuation fund will be subject to 15% tax on this contribution, as is the case with all tax deductible contributions received by a superannuation fund.


Should you require any further information on personal superannuation contributions please feel free to contact Peter Quinn by submitting an online 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.