How does superannuation reduce tax

Because of this, we recommend you consider, with or without the assistance of a Financial Adviser, whether the information is appropriate in light of your particular needs and circumstances. Monday-Friday 8. How does the strategy work? How do you claim the deduction? If you are an employee, another way you may be able to grow your super tax-effectively is to make salary sacrifice contributions see opposite page.

To find out more visit ato. If you salary sacrifice, you pay the concessional tax rate instead of your income tax, which can lead to significant savings. If salary sacrifice is right for you, speak to your employer who can direct some of your pay into your super. When setting up your salary sacrifice you should consider whether the amount you wish to salary sacrifice will:.

All rights reserved. Privacy Policy. Terms of Use. Before tax contributions salary sacrifice. What are before-tax contributions? You can reduce your taxable income with every dollar salary-sacrificed to super. The more before-tax salary you put into your super, the lower your taxable income will be. In addition, you usually don't have to declare your super-related investment earnings on your tax return.

Are you able to start or stop at any time? Can you change amounts at any time? Does your employer charge an administration cost? Does your employer set any limits to how much you can salary sacrifice? The LISTO refunds the 15 per cent contributions tax you pay on your SG contributions and is paid on any salary sacrifice contributions you make. When you convert your super into a retirement income either as a lump sum or pension you benefit from paying low or no tax.

If you are 60 or over, all payments made from a taxed super fund will be tax-free. Two other strategies that you could consider in conjunction with salary sacrificing are the Government super co-contribution and contributing to a super fund for your spouse. Before you take up salary sacrificing or any other superannuation strategy, seek professional advice; a financial adviser can help to develop a super strategy that suits your situation. Individual tax rates for the financial year including Medicare levy.

Superannuation Super explained How much super is enough? Contributing more to super DIY super. How we can help What you can do now Super strategies Make an appointment. Find out more Retirement lifestyle calculator Getting to know your super video Self-managed super funds video Contributing to super guide. Investing Saving and investing Investing explained Why choose a managed fund?

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You can also ask us for a hardcopy. All information on this website is subject to change without notice. Personal Super Super contributions Tax-deductible super contributions explained. Tax-deductible super contributions explained. Share this article. Did you know, you may be able to claim a tax deduction on certain super contributions when you do your tax return? How do I make a tax-deductible super contribution? What are some of the benefits of tax-deductible super contributions?