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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.

Source:  How your super can help you save on tax

Lindale Insurances Pty Ltd ATF Lindale Insurances Trust ABN 27 027 421 832 is a Franchisee of Fiducian Financial Services Pty Ltd, Level 4, 1 York Street, Sydney NSW 2000. AFSL 231103 ABN 46 094 765 134.

The information (including taxation) provided on this website is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice and consider a Product Disclosure Statement.

Disclaimer: The views expressed in this publication are solely those of the author; they are not reflective or indicative of Fiducian. They cannot be reproduced in any form without the express written consent of the author.

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