Contributions & tax concessions

Superannuation is how most Australians save for their retirement, which is why the government offers a range of attractive tax concessions for our benefit. The sooner you understand and take advantage of them, the more you’ll earn over time and the better position you’ll be in to achieve the retirement you’re looking forward to.

Contributing to superannuation

For as long as you work, you can benefit from your employer’s super guarantee contributions, which is an amount equal to 9%¹ of your pre-tax earnings paid into your super fund each quarter. You may also choose to make additional concessional or non-concessional contributions, ultimately tucking away as much money as you can in superannuation. And you can withdraw it all tax free once you turn 60¹ and satisfy a condition of release.

There are, however, caps on how much you can contribute to super each year and exceeding them can cost you money rather than save it. It’s important to understand those caps before contributing to your superannuation, and it may be wise to speak with a financial planner first.

Available tax concessions

Self-employed. If you’re self-employed and make contributions to super, you may be able to claim a tax deduction on these contributions. However, there is a cap on the amount of tax-deductible contributions you can make each year without paying excess tax.

Small business owners. If you plan to sell a portion of your business to fund your retirement, you may be eligible to contribute some or all of the proceeds of that sale to superannuation without affecting the level of other after-tax contributions you can make. The rules are complex, so it’s wise to seek professional advice.

Spouse contributions. If you’re a taxpayer and married or in a de-facto relationship (including same-sex couples), you can make contributions to your partner’s super account from your after-tax pay.   This may entitle you to an 18%¹ tax offset.  To take advantage of this strategy, your partner will need to satisfy age and employment requirements, so it’s wise to speak with a professional financial planner first.

If you’d like to know more about how online booking form to organise an initial, no-obligation consultation with a Commonwealth Financial Planner and start planning for a better life today.

 

• Important information
  1. Applies to taxed funds only. Does not apply to untaxed funds such as the Commonwealth Government Sector Super Scheme. Correct as at 1/01/2011.
  
  This information is of a factual nature only and is not intended to constitute financial product advice. It has been prepared by Commonwealth Financial Planning Limited without considering your individual objectives, financial situation or needs. You should consider its appropriateness in light of your circumstances and consider seeking professional advice relevant to your individual needs before making a decision based on this information. Commonwealth Bank customers who wish to obtain information about retirement planning may do so by contacting a Commonwealth Financial Planner. Commonwealth Financial Planners are Representatives or Authorised Representatives of Commonwealth Financial Planning Limited ABN 65 003 900 169, AFSL 231139, a wholly owned but non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.