Tax deduction ?

Guaranteed Super Return…..       

Today we want to discuss the recent updates to how you can contribute to super and how to maximise your tax refund.

Up until June last year, if you received super contributions from your employer you were prohibited from claiming a tax deduction for any additional money you added to super.

This prompted many to use the concept of salary sacrifice where the employer reduced your before tax pay and added this direct to your super fund.

From 1st July 2017 the rules changed to allow everyone the ability to claim a tax deduction for contributions to super up to $25,000 pa.  This amount includes anything that the employer contributes under Super Guarantee, any salary sacrifice amounts as well as any top up amounts.

For example let us say that you earn $60,000 pa.  The employer contributes 9.5% or $5,700 to super.

That leaves you an amount of up to $19,300 that you could contribute under what is called the concessional contribution cap (assuming that you have the funds).

From a tax position if you did add an amount of $19,300 to super you would save $6,272.50 on tax but the super fund would pay an additional $2,895 in contributions tax.

All up though you would have a bigger super balance and generate a net tax saving of $3,377.50 or a 17.5% return on the additional money invested.

The addition of money is an excellent way to build your retirement balance – especially when the tax office helps! 

We would be delighted to hear from you if you want to discuss how the new rules can be of benefit to you.


Important information: This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a Financial Adviser before making a financial decision.  Information in this document is based on current regulatory requirements and laws, as at 4 May 2018, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Serious Money Financial Consultants, its related entities, agents and employees for any loss arising from reliance on this document



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