Super contribution types
Super contribution types
Everyone’s in a different place when it comes to making additional super contributions. Good thing you have choices. Let’s dive a little deeper.
Personal contributions are non-concessional or after-tax contributions you make to super from your take home pay, after tax has been taken out. How do you make a personal contribution? Well, you’re spoilt for choice:
- BPAY®. View your personalised details on MemberOnline or contact us on 1300 360 149
- Payroll deduction (if your employer offers this option)
- Monthly direct debit from your bank account. Complete the Contribution form
- Cheque. Complete the Contribution form, attach your cheque and send to CareSuper, Locked Bag 5087, Parramatta NSW 2124.
If you're over 65, you'll need to complete an Employment questionnaire before you make a personal contribution.
Claiming a tax deduction
Personal contributions are also tax deductible, as long as you’re under 75 and under the contribution limits. If you claim a tax deduction on a personal contribution then the contribution is counted as a concessional contribution. It goes towards your concessional contribution cap and 15% contributions tax is deducted.
Salary sacrifice is an arrangement between you and your employer where you agree for them to put part of your before-tax salary into your super. You nominate how much you want to contribute each pay cycle and your employer will usually pay this on top of the legislated 9.5%. All before tax is deducted. And that’s where the benefit lies.
This method reduces your taxable income and potentially how much tax you pay. It’s a tax effective way to boost your super over the long-term – especially if you earn over $37,001 a year. Instead of paying tax at your marginal rate, you’ll only pay up to 15% tax on your money as it goes into super (if you earn under $250,000 per year).
These contributions are concessional contributions so they count towards your concessional contribution cap.
If you’re earning a lower income it can be tough to build your super. That’s where the Government’s co-contribution scheme could come in handy.
Established as an incentive to help lower-income earners save for retirement, it can give you a little boost and set you on a regular savings path. If you earn less than $51,813 and make a personal contribution in the 2018/19 financial year you may be eligible for a co-contribution of up to $500.
Your super fund will need to have your tax file number (TFN) and you’ll need to meet certain criteria. Once the criteria are met the co-contribution will be paid directly into your super.
Low income Super Tax Offset (LISTO)
LISTO is a way to make super fair for low income earners and help ensure you don’t pay more tax on your super than your take-home pay.
If your annual income is less than $37,000 you could qualify for a LISTO payment. The LISTO is a refund of contributions tax up to $500.
Super opportunities for couples
Your super balance can be closely tied to your working pattern. And working part-time, taking time off to have and raise children, study, take a career break or recover from an illness can leave your super looking deflated. The super system offers a couple of ways for couples to build for the future together.
Spouse contributions are classed as non-concessional contributions and the same rules apply. To make a contribution you need to complete the Spouse contribution advice form.
You could also claim a tax offset on your spouse contributions of up to $540 if your spouse has a low income or no income. Find out if you’re eligible.
Spouse contribution splitting
Spouse contribution splitting is done once a year after the financial year. You’re effectively moving your employer super contributions to your partner’s super. To request spouse contribution splitting you need to complete the Contribution splitting form.