Save tax by contributing extra $ into super

 

Did you know that you can save tax by putting additional $ into super. Conditions Apply

example 1:

John's taxable income is $110,000

John's marginal tax rate is 32.5% plus 2% medicare levy

Concessional super contributions are taxed by the fund at 15%

Equals 19.5% Tax Saving (34.5% - 15%)

So for every $1,000 John contributes he saves $195 tax

Conditions apply - see notes below

 

example 2:

Sue's taxable income is $140,000

Sue's marginal tax rate is 37% plus 2% medicare levy

Concessional super contributions are taxed by the fund at 15%

Equals 24% Tax Saving (39% - 15%)

So for every $1,000 Sue contributes she saves $240 tax

Conditions apply - see notes below

 

example 3:

Tom's taxable income is $40,000

John's marginal tax rate is 19% plus 2% medicare levy

Concessional super contributions are taxed by the fund at 15%

Equals 6% Tax Saving (21% - 15%)

So for every $1,000 John contributes he saves $60 tax

Conditions apply - see notes below
 

Notes:

1- If your Adjusted Taxable Income (ATI) is above $250,000 ALL concessional super contributions will be subject to the additional 15% Division 293 tax
2- If age over 67 then you may need to pass a work test
3- Concessional Contributions Caps apply
4- You can use prior year unused concessional limits conditions apply
5- You cannot withdraw funds out of super until you satisfy a condition or release eg reaching age 65
6- Individual Tax Rates
7- The extra contributions MUST hit the super fund's bank by 30/06
8- Taxable Income = wages plus other income eg bank interest less work related expenses, donations, concessional super contributions etc
9- Extra super payments will lower your Taxable Income BUT they will be added back to your Adjusted Taxable Income (ATI)
10- If you choose not to claim a tax deduction the extra contributions will be treated as non-concessional contributions (limits apply)
11- If you are a low or middle-income earner and make personal (after-tax) super contributions to your super fund, the government also makes a contribution (called a co-contribution) up to a maximum amount of $500

You can make extra contributions in 2 ways
1- through your employer i.e. salary scarifice
2- yourself i.e. pay directly into the fund and claim a tax deduction at item D12 on your personal tax return. You must give a notice of intent to claim a deduction to your super fund on or before whichever of the following days occurs earliest, either:

• the day you lodge your tax return for the year in which the contributions were made
• the last day of the income year after the income year in which you made the contributions.