Top 5 Tax Planning Tips for Farmers
April 16, 2025
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5 Top Tax Planning Tips for Farmers For farmers expecting a profitable year this financial year, now is the time to start thinking seriously about
3 Super Strategies For Farmers
Adding to your super can be a smart move, not just for your future, but for your tax planning too. It’s a strategy that can help you grow your retirement savings and potentially reduce the amount of tax you pay.
Here are a few common approaches accountants use to make super contributions part of an effective EOFY plan. As always, chat with your advisor before making any financial decisions.
1. Add To Your Super And Claim Tax Deductions
If you contribute some of your after-tax income or savings into your super, you may be able to claim a tax deduction. This reduces your taxable income for the financial year – which could mean paying less tax – while also helping grow your retirement savings.
Your contribution is generally taxed at 15% inside the fund (or up to 30% if your income is $250,000 or more). For many people, that’s lower than their marginal tax rate – which can be as high as 47% including the Medicare Levy – potentially saving you up to 32% in tax.
To claim a deduction, you’ll need to submit a valid Notice of Intent to your super fund and receive confirmation before lodging your tax return, starting a pension, or accessing the money in any way.
These contributions count towards your concessional contributions cap, which is $30,000 for the 2024/25 financial year. However, if you didn’t use the full cap in previous years (from 2018/19 onwards), you may be able to make catch-up contributions without penalty – depending on your eligibility.
Keep in mind, concessional contributions include your employer’s Super Guarantee and any salary sacrifice amounts too. So it’s important to look at the full picture – chat with your adviser to work out what’s best for you.
2. Get More From Your Salary Or Bonus
If you’re an employee, you may be able to ask your employer to direct a portion of your pre-tax salary or bonus straight into your super fund. This is known as a salary sacrifice arrangement.
Instead of paying income tax on that amount (which could be up to 47% including the Medicare Levy), it’s generally taxed at 15% inside super – which could mean a significant tax saving, depending on your income.
It’s also a great way to grow your super steadily over time, because the money goes in before it hits your bank account – so you’re less likely to spend it.
Salary sacrifice contributions count towards your concessional contributions cap (which is $30,000 for 2024/25), along with your employer’s Super Guarantee contributions and any personal deductible contributions you make.
If you’ve had unused concessional caps over the past few financial years, you might also be eligible to make catch-up contributions, depending on your circumstances.
Talk to your employer to see if they offer salary sacrifice – and check in with your adviser to make sure it’s the right strategy for you.
3. Convert Your Savings Into Super Savings
Looking to invest more in your super using your after-tax income or savings? You might consider making a non-concessional (after-tax) contribution.
These contributions don’t reduce your taxable income, but your money can still benefit from being invested in super – where earnings are taxed at a maximum of 15%, which is often lower than the tax you’d pay on investments held outside of super.
Just be mindful of the non-concessional contributions cap, which is $120,000 for 2024/25, or up to $360,000 if you meet the conditions to bring forward future years’ caps.
Going over the cap can result in penalties, so it’s important to stay within your limit.
Also, to use this strategy in 2024/25, your total super balance must have been under $1.9 million as at 30 June 2024.
And remember – once the money is in your super, you generally can’t access it until you reach your preservation age or meet other conditions of release.
If you’re thinking about using this strategy, speak with your adviser first and visit the ATO website for more details: ato.gov.au
*This blog/article is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances. If relevant: Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.
Don't pay more tax than you have to.
Contact Matt today to discuss how you can save on tax and plan for the future.
Three Super Strategies for Farmers
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Making Super contributions a part of your tax planning strategy is a great way to boost your savings while potentially saving on tax. These 3 super strategies can help you save on tax while increasing your superannuation.
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