Extra Super Contributions - Verifying How It Works

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  TheMindsetTraveller on 10/03/2024 - 13:03

  +1

  The key benefit to me is putting any income above $45k into extra contributions because you avoid being taxed at 32 cents in the dollar vs 15 cents if you put it into super early.

  • 

    witsa on 10/03/2024 - 13:07

    exactly. This is why I'm doing it

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  Dollar General on 10/03/2024 - 13:06

  But is the tax benefit of putting $100K into your super what you expect? Would it not be better to spread it over a few years rather than dump it all into one year?

  • 

    witsa on 10/03/2024 - 13:08

    yes that's true, except this is the last year i can do this as my super balance will be above 500k in the next year.

    I'll probably still make extra contributions but it'll only be up to the current year's concessional cap.

    • 

      Dollar General on 10/03/2024 - 13:09

      +2

      Ok but you don’t need to get your employer to do it. Just dump all your after tax pay into super

      • 

        witsa on 10/03/2024 - 13:15

        ah right - does that work?

        I thought the whole point is you pay less tax. If you're putting in money that has already been taxed, doesn't that just mean you're putting in your income into it?

        Like say if your pay is 1000 per week. If you put it all into super, you can put $850 into super but if you get it paid out, it might only be only say $700 per week. Even if you then put that $700 into super, you've still paid the $300 in tax instead of $150.

        • 

          Dollar General on 10/03/2024 - 13:42

          @witsa: If you employer is happy to do it, that works best. If they aren’t, make the contribution yourself

        • 

          localhost on 10/03/2024 - 17:20

          @witsa: if your gross payment is $1000 and pay $300 in taxes, after putting $1000 in super, you should get $150 back. Check ATO website for details.

        • 

          jsb on 10/03/2024 - 20:22

          @witsa: Net result is the same. If you give NOI ( notice of intent to claim tax refund) to your super fund. Tax office will give you your previously deducted tax back to you.

          The only thing is that you will have to use your savings of $300 to put that $1000 into super. You will get that $300 back as tax saving afterwards.

        • 

          Dejaar on 11/03/2024 - 15:56

          @witsa: You get a tax deduction if u do it this way. Best to speak to your fund tho…they will tell u best way to do it.

• 

  avoidfullprice on 10/03/2024 - 13:07

  I can literally just tell my employer to put my entire pay into super?

  You can ask them, and they will ask you if you want to salary sacrifice your while pay and go from there.

  You can also dump 100k into your super and claim them as concessional payment before you lodge tax return.

  Ideally I would just lower taxable income to just under the tax free threshold.

  Unsure if you have other FBT or other payment from services Australia . This may impact on those

  DYOR

  • 

    HardQuiz on 10/03/2024 - 13:15

    DYOR

    This thread is part of it ?

    • 

      witsa on 10/03/2024 - 13:20

      yep that's right. This stuff is complicated!

    • 

      avoidfullprice on 10/03/2024 - 14:20

      +1

      DYOR of what I provided

  • 

    witsa on 10/03/2024 - 13:19

    "You can also dump 100k into your super and claim them as concessional payment before you lodge tax return."

    Ah right - Dollar General up ahead mentioned something like that. I didn't know this was possible.

    So are you saying I can just put extra money into my super at any time and that extra money I put in if under the concessional cap, I can take off my total income for the year?

    This might be a simpler method than doing it through my employer. Do you know if myGov prefills all this info as well?

    • 

      avoidfullprice on 10/03/2024 - 14:17

      I can take off my total income for the year?

      Take off Taxable Income. It won’t take off reportable income

    • 

      miwahni on 10/03/2024 - 22:50

      If you're going down this route, make sure you advise your super fund that you intend it to be concessional contributions and get their acknowledgement before you actually lodge your tax return.

• 

  sumyungguy on 10/03/2024 - 15:57

  I did this when my partner's super was due to exceed $500K. Best source of advice is your super fund. Same net outcome whether you salary sacrifice or make a post-tax contribution. If you're a bit short and are OK to make the allocation, use redraw. Super growth will likely exceed your mortgage payments.

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  jsb on 10/03/2024 - 18:35

  I did that last year and also this year.
  You don't need to go through your employer. You can just deposit from your savings and then file NOI(Notice of Intent)with your super fund. Your super fund will deduct 15% tax and will notify tax office and your taxable income will reduce

  Things to keep in mind:
  1. There are different ways to transfer money to your super. Make sure you use Direct debit or ask your super fund. BPay is only for non- concessional contribution. Don't use that.
  2. Make sure you submit NOI. You can do that anything after transfer and before filing tax return.

  Check
  https://paycalculator.com.au/

  • 

    sss333 on 11/03/2024 - 17:38

    1. BPay is only for non- concessional contribution.

    Looking at the instructions on my superfund you can use BPay

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  debb on 11/03/2024 - 11:59

  This has detailed info including eligibility, restrictions, timings, etc., and copy of Notice of Intent form.
  How to make personal super contributions, including claiming a tax deduction so they are concessional contributions.

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  Terbo on 12/03/2024 - 19:06

  The facts
  1. The 500k balance rule is as at 30 June of the previous year, so if you arent there by this June you may still qualify for next year (and yes you can go below later and re qualify)
  2. They use up current contribution threshold first ($27,500) them work backwards for each year of carryover allowable contribution
  3. Always better to get paid and contribute the money yourself, your employer is not reliable, may contribute after 30 June and iss your window, meanwhile put money in offset/acct
  4. Get the money in by mid June based on what you estimate your annual taxable income to be, its a straight deduction against your personal income
  5. Once you get your taxable income below $45K then its only 19% personal tax VS 15% Super tax, is the 4% worth the access restriction?
  6. All money you contribute to Super regardless of method is considered a tax free contribution until you lodge a NOI to claim some or all as a deduction for the year
  7. Get the required deduction in asap, then submit your personal tax return and receive 100% of the personal tax paid on that amount refunded (not just the difference)
  8. If you have an older/younger spouse you can consider a Super 'switch' of the net annual contribution to the senior person's acct to set up earlier future tax free access.
  9. Next fin year is $30K contribution threshold and lower tax rate so you will be better off even without catch up access.