How your super can help you save on tax

Boosting your superannuation is a strategic way to secure a comfortable retirement. Here’s a closer look at several methods that can help:

Salary Sacrificing

• Definition: Salary sacrificing involves forgoing part of your salary and directing your employer to contribute it to your superannuation.
• Tax Advantage: Contributions are taxed at 15%, which is often lower than the marginal tax rate (up to 45%).
• Employer Obligations: Your employer must still pay the full super guarantee.

Claiming a Deduction on Personal Super Contributions

• Non-Concessional Contributions: These are made from your after-tax income and are not taxed further in your super fund.
• Concessional Contributions: By claiming a deduction, these contributions are treated as pre-tax income and taxed at 15%.
• Process: Notify your super fund of your intention to claim a deduction.

Government Co-Contributions

• Eligibility: Available to low and middle-income earners who make after-tax contributions.
• Benefit: The government may contribute up to $500 to your super account.
• Automatic Process: No need to apply; the ATO will automatically deposit the co-contribution if eligible.

Spouse Contributions

• Tax Offset: Up to $540 if you contribute $3,000 to a spouse’s super and their income is below $37,000.
• Eligibility Criteria: Both partners must meet specific requirements, and the benefit decreases as the spouse’s income approaches $40,000.
• Strategic Benefit: Helps ensure both partners have adequate super for retirement.

Practical Tips:

1. Review Your Finances: Ensure you can afford a lower take-home pay if salary sacrificing.
2. Maximize Deductions: Keep track of your contributions and claim deductions to optimize tax benefits.
3. Monitor Eligibility: Regularly check your eligibility for government co-contributions and spouse contribution tax offsets.
4. Spousal Planning: Coordinate with your spouse to maximize combined super benefits.

By understanding and leveraging these strategies, you can effectively boost your superannuation and work towards a more secure and comfortable retirement.

Book a complimentary consultation with our Fiducian Financial Adviser who can offer you professional, independent advice based on your circumstances.