Money Doesn’t Come Without Guidance ...
Superannuation or Super is the approach of saving money for your retirement. This arrangement commences when you start working in an organisation. The fund invests in sectors like: shares, properties and managed funds, and also might propose various types of insurances like: income protection. In order to increase your superannuation along with the employer you also contribute in the super fund. It is done due to reasons like: increase in living costs, comfortable lifestyle, etc.
Tax on Superannuation Contributions
The type and amount of contribution creates the basis for tax on superannuation or super contributions. The superannuation contributions are divided into two categories:
Concessional Contributions: Also referred as “before-tax” or “deducted” contributions, it is paid by the employer. It is taxed on the fund and the employer receives a tax deduction. If your age is 49, under 49 or more on 30 June, 2015, concessional contributions are taxed at 15% on the fund, but if your income including the concessional contributions is more than $30,000, then you are taxed at 30%. Some common concessional contributions are as follows:
Non-Concessional Contributions: Also referred as “after-tax” or “undeducted” contributions, is paid by the individual. It is usually not taxed on the fund and the individual does not receive a tax deduction. As it is undeducted contribution the individuals do not have any tax rate. It is topped at $180,000 for the 2015/2016 financial year. But if it is topped more than $180,000, then you will be taxed at 49% for the 2015/2016 financial year. Some common non-concessional contributions are as follows: