How do you put savings into super?
So you’re on board with topping up super with extra payments to grow your balance faster. Find out what’s involved and how to make it as easy as possible.
Super easy ways to save for retirement
How super works makes it easy to save for your future in retirement. As you earn money, your employer is required to make Super Guarantee payments into your super fund. That’s happening without you having to lift a finger.
But there’s a lot more you can do to look after your money in super and that includes saving a little (or a lot) extra. There are a few different ways you can do this:
The amount you decide to save is completely up to you and you can stop making these payments whenever you like. Making an extra $10 or $20 each month and making good investment choices can make a difference to your super balance. Not only that, you could be saving on your income tax each time you get paid.
Salary sacrifice is one way to make regular before-tax payments into your super savings. As a set and forget solution, it helps you save without having to think or do anything else. You might be more comfortable saving into a regular account from week to week or month to month. If you find you don’t need that money for anything else, you can move it to your super fund when you’re ready - by making regular or one-off transfers using BPay or a direct debit arrangement with your super fund. If you do this, you may be eligible to claim a tax deduction on the amount you put into super. While a tax deduction will reduce your taxable income, the amount of personal contributions you claim will be taxed at 15% inside super (similar to salary sacrifice).
To claim a tax deduction you must complete a ‘Notice of intent to claim or vary a deduction for personal contributions’ form and give it to your super fund by the due date. This form is available on the Australian Taxation Office website. If you don’t claim a tax deduction for these contributions, they are after-tax contributions, also known as a personal contribution or non-concessional contribution.
Generally you can’t access your money in super until retirement.
If your partner is a low-income earner, you can help them save more super (subject to eligibility) by:
- helping them make a personal contribution (up to $1,000) to receive a Government Co-contribution of up to $500.
- making a spouse contribution into their account. If your partner is earning less than a certain amount, you may be eligible to receive a spouse contribution tax offset of up to $540.
You can split part of your super guarantee payments, salary sacrifice and personal contributions for which you claim as a tax deduction to your spouse’s super. They still count towards your cap, but this can be a helpful way of boosting your spouse’s lower balance.
Visit the ATO website to find out more about the Government Co-contribution, spouse contribution tax offset and super contributions splitting.
Know your limits
That’s a lot of numbers to try and figure out and you probably don’t remember how much super you paid last year or the year before that. For an easy way to find out how much extra super you can contribute in this financial year you can visit MyGov and go to ATO online services to check on your unused concessional contributions cap, as well as see if you are eligible to carry forward your unused concessional contributions.
Paying extra into super with salary-sacrifice could help you to ...
Did you know?
With salary sacrifice, your extra super payments are still money taken from your income. But as it’s paid before tax, you can potentially pay less tax and save more super.
The tax rate on your concessional super contributions is ...
Did you know?
When you make pre-tax contributions into super you only pay 15% in tax. Depending on your marginal tax rate, you could be paying less tax with every dollar you save.
