Expenses & Your Self-Managed Super Fund
Retirement is pretty much every Aussie’s end goal, but it can also be a daunting idea because of the lack of regular income. Luckily the government has implemented measures to encourage people to plan for their eventual retirement. The biggest way they have done this is through compulsory contributions to retirement savings into Superannuation over an individual’s working life.
While plenty of people chose to go with specific Super Funds, you are also able to self-manage if you would prefer. Self-Managed Super Funds can be great for many reasons, such as flexibility, control, effective tax management, accountability and a wider range of investment choices.
Self-Managed Super Funds can be tempting, but the claiming of expenses on them can be tricky business. There are so many things you need to ask yourself. What is an allowable expense of the fund? What is actually tax deductible?
Any costs or expenses must be allowable under the Superannuation law & fund deed, and Self-Managed Super Fund operations and investment strategy.
The biggest question you will need to ask yourself is – do the costs and expenses relate to the provision of retirement benefits?
All Self-Managed Super Fund expenses will need to be recorded and reported in your fund’s financial statements. Any fund expenses that are paid by members where no claim for reimbursement is made will also need to be recorded as an expense in the fund.
Typical expenses that can be claimed as tax deductions in a Self-Managed Super Fund would generally include:
Operating expenses
Include items like accounting, taxation, audit and actuarial fees.
Statutory fees
Include The annual Australian Taxation Office supervisory levy as well as the Australian Securities and Investments Commission’s annual fees.
Investment Expenses
These would include items such as ongoing management fees, bank fees, interest for limited resource borrowings, property insurance and other rental property expenses. You can also potentially claim financial advice when it relates to a mix of investments from the Self-Managed Super Fund and is not a new plan or strategy. You will need to keep in mind that other investment costs such as brokerage fees are not tax deductible (but instead for part of the asset cost base for capital gains tax purposes).
Legal expenses
These kinds of expenses can be a bit more tricky to navigate. Legal advice may be deductible or capital in nature, depending on the type of advice and services provided.
Trust Deed Updates
These can be made tax deductible only if the update is to ensure that the Self-Managed Super Fund complies with the changes to the superannuation legislation. Other changes will be considered a capital cost.
Member insurance
Certain member insurances can be paid by the Self-Managed Super Fund and then claimed as a tax deduction. These include life and disability cover.
Extra investments
People will often try to claim extra investment expenses such as laptops, subscriptions, and seminars. Be careful with these as the expenses can only be claimed if they directly relate to the running of your Self-Managed Super Fund. Unlike personal tax claims, you can’t have partial personal use and part tax deductible claims in the Self-Managed Super Fund.
Try to avoid falling into the trap of trying to claim everything you can as an expense for your Self-Managed Super Fund because the funds are audited. Ask yourself these questions
- Does this expense relate to the operation of my Self-Managed Super Fund?
- Is it TRULY an expense of my Self-Managed Super Fund?
- Is it for the sole purpose of my Self-Managed Super Fund?
- Is the expense tax deductible or a capital cost?
If you are in doubt, please feel free to contact us. We would love to help!
Phone: 08 6336 6200
Email: info@ascentwa.com.au
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If your business provides a car to an employee (or you’re the business owner/employee using it), there’s a good chance the Fringe Benefits Tax (FBT) rules apply. A car fringe benefit arises when a car owned or leased by an employer is made available for the private use of the business owner, an employee or their associate (such as a family member). “Private use” doesn’t just mean weekend road trips — it can include everyday commuting and even cases where the car is parked at an employee’s home, making it available for personal trips. Understanding how FBT is calculated and what records to keep is essential for compliance — and for avoiding paying more tax than necessary. What counts as a “car” for FBT purposes? The FBT law defines a car as a motor vehicle (except a motorcycle or similar) designed to carry less than one tonne and fewer than nine passengers. From 1 July 2022, some zero or low-emission vehicles are exempt from FBT, provided they meet certain criteria — for example, they must be first held and used after 1 July 2022 and must not have attracted Luxury Car Tax. Electric vehicle running costs, such as charging, are also exempt when the vehicle itself qualifies. Two main methods for calculating FBT on cars There are two ways to calculate the taxable value of a car fringe benefit. 1. Statutory formula method This method applies a flat 20% statutory rate to the base value of the car, adjusted for the number of days in the FBT year the car was available for private use. The formula is: (A × B × C ÷ D) − E A = Base value of the car (cost price plus GST and certain accessories, less registration, stamp duty and eligible reductions) B = Statutory fraction (generally 20%) C = Days available for private use D = Total days in FBT year (365) E = Employee contributions If the car has been owned for at least four full FBT years, the base value can be reduced by one-third. 2. Operating cost method This method calculates the taxable value by applying the private use percentage to the total operating costs of the car (actual and deemed costs). The formula is: Taxable value = [Operating costs × (100% − Business use %)] − Employee contributions Operating costs include: Fuel, oil, repairs, maintenance, registration and insurance Lease costs (for leased cars) Deemed depreciation (25% diminishing value) and deemed interest for owned cars Certain costs, such as tolls, car parking and insurance-funded repairs, are excluded. The business use percentage is determined by odometer readings, logbook records, and a reasonable estimate based on usage patterns. The three-month logbook requirement (operating cost method only). If you use the operating cost method, you must keep a logbook for at least 12 continuous weeks (roughly three months) to record: The date of each trip Odometer readings at the start and end Total kilometres travelled Whether the trip was for business or private purposes The purpose of each business trip This logbook is generally valid for five years, but you must start a new one if usage patterns change significantly (e.g., a role change, relocation or different duties). You also need to record odometer readings at the start and end of each FBT year. Why record-keeping matters. Keeping accurate records can support a higher business use percentage (and therefore a lower FBT bill). They also ensure you claim only legitimate business kilometres and help you provide evidence if the ATO reviews your FBT calculation. Finally, your records help you decide which calculation method (statutory or operating cost) is more tax-effective. Key takeaways for businesses and employees. If a car is available for private use, FBT may apply — even if the car isn’t driven often for personal trips. Electric cars may be FBT-exempt if they meet eligibility criteria, but you may still need to calculate their taxable value for reporting purposes. The operating cost method often works better if business use is high — but only if you have a compliant logbook. Keep odometer readings, expense records and a valid logbook to support your claims. Need help with your FBT obligations? Get it at Ascent Accountants. We guide business owners through every step of FBT compliance — from choosing the right valuation method to maintaining the right records for ATO peace of mind. If you provide cars to employees or use a company vehicle yourself, now is the time to review your FBT position before the next FBT year rolls over. Let’s talk .
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