Super contributions for an associate (for example, spouse, child or other relative) cannot be deducted if the associate does non-principal work such as bookkeeping, issuing invoices, administrative duties and running the home office.

However, super contributions for an associate can be deducted if the associate does principal work which contributes to the PSI. Deductions are allowed up to the minimum percentage that you would have to contribute to meet superannuation guarantee (SG) requirements for that associate.

You can contribute more than the SG minimum percentage if, in engaging an associate, you pass the employment test, as you will be a personal services business (PSB) and the PSI rules won't apply to that income.

If an associate completes work that generates income that is not PSI, deductions for super contributions for that work are not affected by the PSI rules. The PSI rules also don't affect deductions for super contributions that are made for yourself.

The term 'super contributions' refers to contributions you make to a super fund or retirement savings account. Deductions for super contributions are subject to other tax rules.