Super Management Tips for the Year Ahead

1 min read
7/10/20 4:16 AM

Research suggests the lifestyle that most Australians desire is likely to be unmet by their superannuation savings. Hence it is likely that you will need to cutback on your retirement plans to make sure your savings last the distance. You can make a difference, and you can do this by taking advantage of a number of options available to boost your super. As always, the earlier the better.

1 – SALARY SACRIFICE CONTRIBUTIONS

Salary Sacrifice is just as the term suggests, you’re sacrificing your salary – where instead of receiving your salary in your pocket today, you request for it to be added to your super. These contributions are also known as ‘pre-tax’ contributions and like your regular super guarantee contributions, these salary sacrifice contributions will be taxed at 15%, making it a tax-effective way to save for your super. It’s important to remember that there is a cap on your pre-tax contributions of $25,000 – these includes your employer Super Guarantee as well. For example, if you receive super $10,000 of super from your employer this financial year, you can add a maximum of $15,000 of pre-tax contributions to your account.

2 – LOW-INCOME SUPER TAX OFFSET

If your annual income is $37,000 or less, and you or your employer made additional voluntary contributions to your super, you may be eligible for a tax refund of up to $500 into your super account. If you are eligible for the Low-income super tax offset, the ATO should automatically calculate it and deposit it in your super account.

3 – PERSON CONTRIBUTIONS

Personal contributions (or member contributions) are another way to add to your super – especially, if you’re self-employed or out of work for the time being. These contributions are also known as ‘after-tax’ contributions, which means that these contributions have already been taxed at your personal marginal tax rate, so these contributions won’t be taxed again when they enter your account. You can make a maximum of $100,000 of after-tax contributions per financial year.