Guidance

Ways super can help you to manage tax

Ways super can help you to manage tax

One of the great things about super is that you generally pay less tax - both on the money that goes in, and on the earnings your money makes.

This can help make super one way of managing your tax.

Ways super can help you to manage your tax

  • You’ll generally pay just 15%  on contributions made from your pre-tax salary e.g. employer super guarantee and salary sacrifice contributions
  • If you’re contributing a portion of your salary into super by salary sacrifice, this can lower your taxable income which might help you to manage the amount of tax you need to pay
  • Earnings you make on your money within super are taxed at a maximum of 15%, or if you’re receiving a pension through your super, tax-free  – the same investment earnings outside super may be taxed at your marginal tax rate
  • If you’re self-employed, you can make contributions into your super and you may be able to claim a tax deduction
  • Once you turn 60, provided you’re in a taxed super fund, there’s no tax on the super benefits you withdraw or take as pension payments

Don’t get caught above the cap

  • When you make contributions into your super, make sure you don’t go above the annual caps. Once you exceed these caps, the tax advantages with super fall away and your contributions will be taxed at the highest marginal tax rate plus Medicare levy plus other applicable levies. You can find out more information at the Australian Taxation Office (ATO) website
  • Tax can be complex and often unique to your own situation. Make sure you talk to your accountant or financial planner about your personal situation

This article is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. 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. The Commonwealth Bank 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.