Below is a list of super contribution options available before 30 June 2021. We encourage you to read this ACCRU FACT SHEET, and if any areas are unclear, please contact your local Accru Office.
“CCs” – Concessional contributions (tax deductible):
- CCs include – super guarantee contributions from your employer and personal deductible contributions. Excess contributions treatment applies if you exceed your cap.
- Tax deduction – To be deducible in the 2021 financial year, CCs need to be received by your Fund before 30 June 2021.
- Cap– The annual CC cap is $25,000 for all members, regardless of age.
- Increasing to $27,500 from 1 July 2021.
- Excess contributions – Any excess CCs are assessable income of the individual and taxed at marginal rates with a non-refundable tax offset of 15%. If the excess is elected to be released from the Fund, it will not be assessable income.
- Unused concessional cap carried forward – Individuals can make a catch-up CC in the 2021 financial year using unused carried forward amounts from 2019 and 2020 financial years. Member balances as of 30 June 2020 must be below $500,000 to make a catch-up contribution. Unused CC cap amounts not utilised after 5 years will expire.
- Division 293 Tax– An additional tax of 15% will be imposed on CCs if your adjusted taxable income was greater than $250,000. This tax can be paid by yourself or by your Fund.
- Work test– If over 67 years (increased from 65 from 1 July 2020), you need to pass a work test to contribute. This means gainfully working 40 hours over a 30-day period at some point during the 2021 financial year (requires a PAYG summary, volunteering is insufficient).\
- Individuals aged 65 to 74 with member balances under $300,000 can make voluntary contributions to their Fund for 12 months from the end of the financial year in which they last met the work test.
- Super guarantee rate is currently 9.5%. This will increase to 10% from 1 July 2021.
- Personal super contributions – If employed, your employer would have been making super guarantee contributions to your Fund, on your behalf.
- “Top up contribution option” – You are able to contribute a “top-up” CC into your Fund before 30 June 2021, which will be deductible in your own hands.
- To make a deductible contribution to your Fund, ensure you advise your Fund of this intention with the appropriate form.
- Your Fund will issue a s290-170 notice to confirm deductibility of the top-up contribution. You will need to send this notice to us before we complete your 2021 tax return.
- Extra note for employers – Superannuation contributions are only deductible once physically paid to your employees’ Funds. Your June 2021 quarter super guarantee liability could be paid before 30 June 2021, to claim an extra tax deduction in the 2021 financial year. However, contributions paid to the ATO Small Business Superannuation clearing House are generally immediately deemed received by the employee’s fund.
“NCCs” – Non-concessional (tax free) contributions:
- Cap – The annual NCC cap is $100,000 for the year ended 30 June 2021.
- Increasing to $110,000 from 1 July 2021.
- Bring forward rule – $300,000 over 3 years, if under 65 years.
- Transitional rules apply if this “bring-forward rule” was triggered in the 2019 financial year. Contact your local Accru office for confirmation if you are unsure.
- If your member balance is greater than $1.4m on 30 June 2020, contact Accru before making a bring-forward contribution as limits apply.
- Proposed, but not law yet – increasing bring forward rule age from 65 to 67.
- Excess contributions – taxed at 47% unless elected to release the excess from the Fund.
- Balances over $1.6m – If your member balance in your Super Fund was over $1.6m on 30 June 2020, you are NOT able to contribute any further NCC for the 2021 financial year.
- Increase in threshold – The general transfer balance cap increases from $1.6m to $1.7m from 1 July 2021.
- Other contributions – For further details on downsizer contributions, first home super saver scheme, spouse contribution tax offset, contribution splitting, government co-contributions, and low-income super tax offset, please refer to the fact sheet in the link above.
For Fund members in pension mode, kindly ensure that you withdraw in cash the required minimum pensions from your SMSF before 30 June 2021. We also encourage you to read this ACCRU FACT SHEET, and if any areas are unclear, please contact your local Accru Office.
- Minimums – The minimum amounts required to be withdrawn were documented in the send-out package for your 2020 SMSF reports.
- Continuing this year – The Coronavirus Acts have reduced the minimum payment amounts by half for the 2021 financial year.
- Please note that any pensions you have already withdrawn during this financial year will count towards the minimum amounts above.
Instant write-off for small business entities (SBE)
- Immediate deduction allowed in the 2021 financial year for depreciating assets, as follows:
- Purchased by 31 December 2020, ready for use by 30 June 2021: $150,000 cost (including GST) threshold.
- Purchased and ready for use between 6 October 2020 and 30 June 2022: full cost of the asset.
- The increase to uncapped write-off provisions has also been extended to include businesses with turnover <$50m (for new or second-hand assets) and with turnover between $50m and $5b (for new assets only).
- Note that any small business pools will be written off in full for the 2021 financial year.
- The entire cost of the asset must be less than the relevant threshold, not just the taxable purpose proportion.
- The threshold will revert to $1,000 from 1 July 2022.
- The cost car limit for depreciation for the 2021 financial year is $59,136. This is the maximum tax deduction you can claim for the purchase of a new car. “Car” means a passenger vehicle designed to carry a load less than one tonne and fewer than nine passengers. If not classified as a car, no cost car limit applies. This also means that the maximum GST credit able to be claimed on a car purchase is $5,376.
JobMaker hiring credit
- Available to eligible employers over 12 months from 7th October 2020, for each additional new job they create for an eligible employee (must work >20 hours per week and have received JobSeeker, Youth Allowance or Parenting Payment for 1 month in the 3 months prior to when they are hired.)
- $200 per week for ages 16-29 years and $100 per week for ages 30-35 years
- Maximum $10,400 per additional new position created.
- Must increase employee head count of business.
General business tax planning options and other deadlines
- Single touch payroll (STP) – from 1 July 2021, ALL employers are required to use STP enabled software for reporting to the ATO. Please contact your local Accru office if you need help setting up your STP system.
- Finalisation declarations must be lodged each year to the ATO before 14 July (20 or more employees) or 31 July (19 or less employees). These replace the PAYG Payment Summaries you used to provide to employees and the ATO.
- Company tax rate for “base rate entities” for 2021 financial year– 26%. Base rate entities have aggregated turnover in 2020 financial year of less than $50m and 80% or less of their assessable income from the 2020 financial year is passive.
- All other companies remain taxed at 30%.
- From 1 July 2021, the lower company tax rate will reduce to 25%.
- Carrying back company losses:
- Companies with less than $5b turnover are able to carry back losses from 2020, 2021 and 2022 financial years to offset previously taxed profits in 2019, 2020 and 2021 financial years.
- Generate a refundable tax offset in the year in which the loss was made, based on the tax rate in the loss year.
- These rules only apply for the 2021 & 2022 Financial Years.
- Other allowable tax deductions – act before 30 June 2021!
- Pay June 2021 quarterly super guarantee for your employees before 30 June 2021.
- Pay June 2021 quarterly FBT instalment before 30 June 2021.
- Approve and notify staff of any bonuses before 30 June 2021 to claim a tax deduction.
- Approve any directors’ fees before 30 June 2021 to claim deduction.
- Think about purchasing of business assets to take advantage of temporary full expensing.
- Review your asset schedule and scrap any unused assets.
- Check your trading stock for obsolete items or damaged stock and value accordingly.
- Consider your debtors and write off any unrecoverable debts before 30 June 2021 – the debt must be bad and not merely doubtful.
- Small and Medium Businesses (turnover less than $50m) can claim full deductions for prepaid expenses such as office supplies, insurance, rent, lease payments, interest on business loans, advertising, and maintenance contracts – where the relevant services will be provided within 12 months of the date of expenditure.
- Taxable payment reporting– businesses need to lodge Taxable payments annual report to the ATO by 28th August 2021 if they operate in the fields of building, construction, courier, cleaning, road freight, security, investigation or surveillance, or information technology services. This report provides information about payments you made to contractors (subcontractors, consultants, and independent contractors) during the 2021 financial year.
- Tip – even if you did not pay any contractors in 2021 financial year, you will still need to lodge a form reporting this to the ATO if you are in this industry.
- HELP repayment rates and thresholds– once your income reaches $46,620, repayments of the debt will start. Repayment rates start at 1%, with 10% max for income over $136,740.
Where applicable, ensure that trust distribution resolutions are completed by 30 June 2021 (or earlier if required by your trust deed), showing entitlements to the trust beneficiaries. Where you wish to stream capital gains or franked dividends to specific beneficiaries, ensure your trust deed allows this and review the reporting requirements.
Of course, please understand that the highlights above are not financial or tax advice, and we would recommend that you contact your local Accru advisor if you would like to discuss your personal situation or find out more.