Superannuation Contributions for Farmers: Tips & Strategies Before EOFY
FA Contributor
14 April 2025, 11:45 PM
Advisor Contribution by Catapult Wealth
As the end of the financial year (EOFY) approaches, Australian farmers should take time to review their superannuation (super) contributions to ensure they are maximising their retirement savings while taking advantage of available tax benefits. Managing super effectively can also help mitigate the impact of fluctuating farm income. Here are some key considerations and strategies for farmers leading up to June 30.
1 Understand Contribution Limits
Concessional Contributions
Concessional (pre-tax) contributions are taxed at 15% and include employer contributions, salary sacrifice amounts, and personal deductible contributions. The annual concessional contribution cap for the 2024-25 financial year is $30,000.
Tip: Use Carry-Forward Contributions
If your concessional contributions have been below the cap in previous years and your total super balance is under $500,000, you can carry forward unused amounts from up to five previous years. This is particularly useful for farmers with variable incomes, allowing them to make larger deductible contributions in high-income years.
Non-Concessional Contributions
Non-concessional (after-tax) contributions are capped at $110,000 per year, or up to $330,000 under the bring-forward rule (if eligible). These contributions are not taxed within the fund and can help grow retirement savings more quickly.
Tip: Consider Non-Concessional Contributions for Estate Planning
Farmers often have lumpy asset-rich but cash-poor financial structures. Non-concessional contributions provide an opportunity to transfer funds into a tax-effective superannuation environment while considering estate planning strategies.
2 Timing Contributions for Tax Efficiency
To claim a tax deduction for personal super contributions, funds must be received by your super fund before June 30. Ensure payments are processed in time to meet deadlines, particularly if relying on bank transfers.
Tip: Lodge a Notice of Intent to Claim
If you make a personal super contribution, you must submit a ‘Notice of Intent to Claim a Deduction’ form to your super fund before lodging your tax return. This ensures the contribution is treated as concessional and eligible for a tax deduction.
3 Government Incentives for Low-Income Farmers
If your income is below $43,445 (2023-24 financial year), you may be eligible for the Government Co-Contribution scheme. The government will contribute up to $500 if you make an eligible personal contribution of $1,000.
Additionally, if you earn less than $37,000, you may receive a Low-Income Super Tax Offset (LISTO) of up to $500, helping offset tax paid on concessional contributions.
4 Superannuation for Farm Employees and Family Workers
If you employ workers on your farm, including family members, ensure you meet your Superannuation Guarantee (SG) obligations. The SG rate for 2024-25 is 11.5% of ordinary earnings
Tip: Consider Salary Sacrificing
If farm employees (including yourself as a business owner) want to boost their super, salary sacrificing additional amounts can be tax-effective. However, it must stay within concessional caps to avoid extra tax penalties.
5 SMSFs for Farmers
A Self-Managed Super Fund (SMSF) can be an attractive option for farmers looking to control their super investments, including using super to purchase farmland. However, compliance obligations can be complex, so professional advice is crucial.
Tip: Superannuation Can Own Farm Assets
Under certain conditions, SMSFs can purchase and lease back farmland to the farming business, offering cash flow and tax benefits. However, strict rules apply, so seek advice from a financial expert.
6 Plan for Retirement While Managing Farm Succession
Farmers planning for retirement should integrate superannuation with their succession strategy. Super can provide retirement income while allowing the farm to transition smoothly to the next generation.
Tip: Make Use of Downsizer Contributions
If selling the farm or downsizing assets, those over 55 may contribute up to $300,000 (per individual) into super from the proceeds of their primary residence sale, without affecting contribution caps.
Final Thoughts
Superannuation is a powerful tool for farmers to build financial security and manage tax liabilities effectively. As EOFY approaches, reviewing contributions, maximising incentives, and seeking professional advice can help optimise super strategies for both short-term tax benefits and long-term retirement wealth.
Need Help?
Consult a financial adviser or accountant with agricultural expertise to tailor a superannuation strategy to your specific farming business needs before June 30.
Tony Catt
DIRECTOR - Catapult Wealth
With over two decades of experience in the finance industry, Tony has seen many changes in the markets. Tony has a background in accounting, research, stockbroking and financial planning which allows him to provide a broad range of advice to his clients on different stages of their life. Tony has significant experience in lecturing and seminars, providing help to Regional Skill Training (RST), the Australian Shareholders Association (ASA), regional TAFE and the ASX investor hours for over a decade.
After marrying into a farming family, Tony decided to provide more help to family businesses in South Australia. Succession planning, retirement planning, education of the next generation and protection of wealth are major issues that have been identified.Tony is ideally skilled to help families and as a specialist Self-Managed Super Fund adviser, Tony has the ability to transition clients into retirement with cost effective, tailored retirement solutions.
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Bachelor of Commerce (Adelaide University)
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