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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:

  • Superannuation Guarantee Contributions: The employer pays 9.5% of your salary or wages in a super fund, such payments are called super guarantee contributions or concessional contributions, and it increases to 12% in the forthcoming years.
  •  Salary Sacrifice Contributions: Salary sacrifice is a contract with your manager for some of your before-tax salary to be paid specifically to your super fund, before income tax is deducted. It originates from the amount which is not paid as your pocket salary.
  •  Personal Deductible Contributions: On the off chance that you are self -employed, or an independent individual, you can make contributions to your super and apply for a full tax deduction. It might be suitable if you have made considerable amount of capital gain by sale of property or shares, as this contribution may offset this assessable gain.   

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:

  •  Personal Contributions: It is the voluntary contribution of individual members to their own super funds. As it is a personal contribution you cannot claim any deduction.
  • Spouse Contributions: This contribution is also a voluntary contribution that an individual makes to his/her spouse’s super. You might be eligible for a take offset if your spouse has a low income in the income year. These contributions can be made if the spouse is under 65 years, or has reached 65 years but not yet 70 years and is working with a minimum income at a part-time basis. Such type of contributions cannot be made on behalf of a spouse who is aged 70 years and above.


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