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Your super and tax: What's new in 2018?

Super and tax rules are always changing – providing fresh opportunities to help maximise your retirement savings. Here are two new ways you may be able to help boost your super, as well as your tax return.

Good news for employees

Before 1 July 2017, you could only claim a tax deduction for making a before-tax contribution to your super if you earned less than 10% of your income from salary and wages. But now employees can enjoy a potential tax deduction too. By making a before-tax contribution into your super, you could help boost your retirement nest-egg – and by claiming a tax deduction you could reduce your taxable income. The super contribution is generally taxed at 15%, not your marginal tax rate, which could be up to 47% (including the Medicare levy). Higher income earners will pay an additional 15% tax on concessional contributions within the cap.

This strategy could suit you if your employer doesn’t allow you to salary sacrifice – or if you’d rather not salary sacrifice because it reduces other employee entitlements, such as Super Guarantee contributions. And even if you are salary sacrificing, you might also want to consider using this strategy if you’re keen to contribute the full amount of concessional contributions – which this 2017/18 financial year is capped at $25,000.

Help your spouse – and yourself

Does your spouse earn under $40,000 each year? If so, their super could probably benefit from an extra top up. And now, if you contribute to their super you could potentially receive a tax offset of up to $540. Before 1 July 2017, this tax offset was only available to couples where your spouse earned $13,800 per annum or less. But with the threshold increased to $40,000, more people will be able to help increase their spouse’s retirement savings while potentially improving their own tax position.

What you need to consider

Investing more in your (or your spouse’s) super now is so much more than a tax-effective strategy. By contributing more while you’re working, you’re helping to maximise your nest egg for the time when you (or your spouse) are retired and no longer receiving a regular income from a job or business. But before you decide to make extra super contributions, there are a few things to consider. Remember, once you’ve put any money into your (or your spouse’s) super fund, you won’t be able to access it until you reach preservation age or meet other ‘conditions of release’. For more information, visit the ATO website at What’s more, from 1 July 2017, the Government reduced the concessional contribution cap to $25,000 for everyone - which includes the Super Guarantee that your employer pays into your super. If you go over this amount, you could get penalised – so it’s important to keep this in mind.

Finally, to get the tax-deduction or offset this year, be sure that your super contribution makes it into your super account before 30 June 2018. That’s because the contribution is considered made on the date that it reaches your super fund – not on the day you transfer it from your bank account. So if it hits your super account after 30 June 2018, it won’t be counted for this financial year.

Need advice?

You will need to meet certain eligibility criteria to benefit from these strategies. There are also other strategies you can consider to help you have the retirement lifestyle you want. We can help you decide which strategies are appropriate for you. To find out more, talk to us today.


This information is current as at 15/05/18. This article has been prepared by Heart1Stop, a social media brand owned by Heart Mortgage Services and Heart Financial Advisers. The information contained in this article is an overview or summary only and it should not be considered a comprehensive statement on any matter nor relied upon as such. The views expressed here are not those of Heart1stop, Heart Mortgage Services, Heart Financial Advisers, shareholders, directors or staff and associated contractors and business associates. This article has been prepared without taking into account any person’s objectives, financial situation or needs. Because of this, you should, before acting on any information contained in this article, consider its appropriateness, having regard to your objectives, financial situation or needs. Any taxation information contained in this article is a general statement and should only be used as a guide. It does not constitute taxation advice and is based on current laws and their interpretation. Each individual’s situation may differ, and you should seek independent professional taxation advice on any taxation matters. While the information contained in this article may contain or be based on information obtained from sources believed to be reliable, it may not have been independently verified. Where information contained in this publication contains material provided directly by third parties it is given in good faith and has been derived from sources believed to be accurate at its issue date. It is not the intention of Heart1Stop or Heart Mortgage Services and Heart Financial Advisers that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. To the maximum extent permitted by law: no guarantee, representation or warranty is given that any information or advice in this publication is complete, accurate, up to date or fit for any purpose; and no party of Heart1Stop or associated entities as mentioned is in any way liable to you (including for negligence) in respect of any reliance upon such information. This article may also contain links to websites operated by third parties ("Third Parties") who are not related to Heart1Stop. These links are provided for convenience only and do not represent any endorsement or approval by us.

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