When you retire, your superannuation is likely to be an important, and possibly main, source of income. That*s why it*s a good idea to top it up while you*re still working.
But did you know, there are also some excellent tax benefits you can take advantage of right now 每 just by making your own voluntary superannuation contributions?
There are two main ways to add to your super:
In most cases, yes 每 but usually at a lower rate than your regular income tax.
Super can be taxed at three possible stages:
The good news is, the superannuation tax rates are often a lot less than regular tax on income and normal investment earnings. These are called superannuation tax concessions.
When you become eligible to access your super account, you have a range of options: Leave the funds where they could grow until you need the money; take all or some of it out as a lump sum; or have your fund pay you a regular income stream.
In each case, if you*re aged 60 years or over, your super withdrawals are usually tax-free.
If you withdraw your super before you turn 60 每 either as a lump sum or as an income - then you will probably have to pay tax - so first check when you can access your super.
Activity | Tax Rate | |
---|---|---|
Employer contributions | 15% | If you earn less than $37,001 per year, up to $500 of the tax paid on your concessional super contributions will be refunded into your super account. |
Salary sacrifice and other super contributions you*ve claimed a tax deduction on | 15% | |
Voluntary after-tax contributions | Not taxed | These contributions are not taxed because it is from your after-tax earnings or take home pay. |
Government co-contributions | Not taxed | |
Transferring or consolidating your super | Not taxed | |
Super fund investment earnings up to $3mil balance | 15% | |
Super fund investment earnings above $3mil balance | 30% | |
Exceeding $250,000 income and super contributions per year | 30% | |
Withdrawing money from your super fund at 60 or above | Not taxed |
Remember you can be taxed more if you exceed the contribution cap.
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