Salary sacrifice can be an effective method of boosting your super while reducing your tax along the way.
Salary sacrifice is an arrangement with your employer where you agree to have a portion of your pre-tax salary paid into your super instead of being paid to you as ordinary income. This is also known as a concessional contribution. Depending on how much you earn, this can be a tax-effective way of topping up your super.
Salary sacrifice contributions aren’t subject to income tax but are instead taxed at 15%1. Considering the marginal tax rate can be as high as 47% (Including the Medicare Levy), the savings you can make by salary sacrificing - provided you stay within the contribution limits - can be significant.
See how a little bit extra in your super can make a big difference to your future.
Use this form to set up an arrangement with your employer.
Personal or ‘after-tax' contributions are payments you make to super from your income after income tax is deducted. This is usually from your take home pay, but could also be profits you receive from selling a property or contributions made by your spouse.
These types of contributions are known as non-concessional contributions. You generally won’t pay additional tax when you make these types of contributions, however there are rules around making these types of contributions.
Making spouse contributions helps couples to save for retirement and take advantage of super tax concessions.
If your spouse earns an annual income of $37,000 or less a tax offset of up to $540 is available. All you need to do is make a personal contribution to your spouse’s account of at least $3,000 into a complying super fund, such as EISS Super.
The tax offset amount will gradually reduce for income above $37,000 and completely phases out when your spouse’s annual income reaches $40,000.
Your spouse must be under age 67 or aged 67 to 74 and meet the work-test (at least 40 hours over 30 consecutive days) to be eligible to receive this contribution.
Please note, you will not be entitled to the tax offset when your spouse receiving the contribution:
If you’re a low or middle income earner and make personal (after-tax) contributions to your super, the Government also makes a contribution (called a co-contribution) up to a maximum amount of $500. The amount of government co-contribution you receive depends on your income and how much you contribute.
1 30% for high income earners where your concessional contributions, taxable income and reportable fringe benefits exceeds $250,000 (known as Division 293 tax).
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