By putting a little extra into your super every month, you'll pay less tax with only a minimal impact on your take-home pay. Here's how it works: You can have additional money paid into your super account by entering into a salary sacrifice arrangement with your employer. When you salary sacrifice you agree to forgo part of your regular salary in return for a super contribution. The benefit of this is that you generally pay just 15%² tax on the money that's added to your super (instead of your marginal tax rate of up to 49%³). This can make saving through super highly tax effective when compared to saving the same amount outside of super.
Here's what to do:
- Contact our Wealth Management team and ask them how much you should contribute. You can contribute up to $30,0004 (including your employer's super guarantee contribution) pre-tax each year before further tax applies.
- Speak to your HR department about setting up a salary sacrifice arrangement.
With tax time almost here, it's time to discover how putting a little extra in super now could keep the good times coming. To make the next few important years count and be super ready for retirement, contact us now via firstname.lastname@example.org or +61 3 9836 2900.
¹ 15% contribution tax applied. Marginal tax rate is 37% + 2% Medicare levy. The government has proposed changing the personal income tax threshold from $80,000 to $87,000, this would mean that if you earn $85,000 your tax rate would be 32.5% + 2% Medicare Levy and figures in the example would change accordingly. Effective 1 July 2016, subject to election and legislation being passed. ² Members who currently earn above $300,000 will be taxed on concessional contributions at 30%. The government has proposed reducing this threshold to $250,000 from 1 July 2017, subject to election and legislation being passed. ³ Including applicable levies. 4 The government has proposed to change this to $25,000 effective 1 July 2017, subject to election and legislation being passed. This document has been prepared by Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468 (Colonial First State) based on its understanding of current regulatory requirements and laws as at May 2016. This document is not advice and provides information only. It does not take into account your individual objectives, financial situation or needs. You should read the relevant Product Disclosure Statement available from the product issuer carefully and assess whether the information is appropriate for you and consider talking to a financial adviser before making an investment decision. Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information. Colonial First State is also not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.