Part 2 In Child Care Super’s series on how to make additional contributions into super
Adding money into your superannuation is a great investment in your future
Putting extra money into super today, on top of your employer’s super contributions, can help ensure you’ll have enough to enjoy life when you stop working.
The experts say you’ll need around $500,000*. That may sound like a lot, but you don’t have to contribute large amounts of money to make a difference. Small regular amounts can add up to thousands of extra dollars over time.
There are lots of ways you can add to your super
You can add to your super via before-tax contributions, after-tax personal contributions, spouse contributions as well as contribution splitting.
In this blog post we’ll explain what a before-tax contribution is and how you can make them.
A before-tax contribution (also called a ‘salary sacrifice’ contribution) is a payment made into your super account from your before-tax salary. You can choose to make regular deductions or one-off payments, whatever suits you best.
If you’d like to make regular payments, an easy way to do this is via payroll deduction. This is where your employer takes a specified amount of money out of your before-tax salary each pay cycle and pays it into your super fund, along with their employer contribution. You’ll need to ask your employer if they can do this.
If they can, remember to specify that they are “before-tax” contributions so they don’t accidentally make after-tax deductions instead. Its important to note that if you make before-tax contributions you will not be eligible for the Government Co Contribution.
Check with your super fund to see what paperwork you need to fill in. Child Care Super members can complete a payroll deduction form and hand it to their employer. If your employer isn’t able to set-up a before-tax deduction, you can still make regular or one-off payments after-tax via cheque or BPAY – and then claim a tax deduction – more on this below.
Save on tax while saving for your future
Making before tax contributions is also a great way to reduce your tax, as super contributions – for most people -are taxed at just 15%. In addition to paying a lower rate of tax on your sacrificed amounts, the more of your before-tax salary you choose to sacrifice into your super, the lower your taxable income – which could mean paying less at tax time.
Can’t afford add to your super right now?
If money is a little tight right now and you don’t have a lot left over at the end of the week, SUPERSUPER might be the answer you’ve been looking for! It’s a shop and save super rewards program which offers cash rewards from hundreds of retailers which are then automatically added to your super account. The program is exclusive to Child Care Super so you need to be a member to use it.
If you are interested, you can find out more information about Child Care Super and SUPERSUPER at childcaresuper.com.au.
For more information on after-tax contributions – including the limits (called contribution caps) on the amount that can be put into super each year – visit https://www.ato.gov.au/Individuals/Super/Growing-your-super/Adding-to-your-super/Salary-sacrificing-super/.
* https://www.superannuation.asn.au/resources/retirement-standard
Guild Trustee Services Pty Ltd. ABN 84 068 826 728. AFSL 233815. RSE License Number L0000611. Trustee for the Guild Retirement Fund ABN 22 599 554 834 (which includes Child Care Super). Before acting on any information, you should consider whether Child Care Super is right for you by reading the Product Disclosure Statement at childcaresuper.com.au.
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Employer can't help? You can do it yourself! If your employer can’t process salary sacrifice contributions, you can make an after-tax contribution from your own pocket and claim a tax deduction. After-tax contributions can be made by cheque or via BPAY. Child Care Super members should use Biller Code 40865 and the BPAY Reference Number on their latest statement (or go to Member Online). If you want to claim a tax deduction, you’ll need to complete a Notice of intent to claim or vary a deduction for personal super contributions form, available from www.ato.gov.au and lodge it with Child Care Super. Other conditions apply. Contact Child Care Super for details. |