How to Increase Superannuation and Reduce Income Tax

Most of us want to be able to retire with a healthy nest egg, but aren't sure the best way to go about it. At present your employer pays 9.5% of your pay into a superannuation fund of your choice, How can you increase this and claim a tax advantage at the same time?

On the 1st of July 2017, Superannuation laws changed to allow you to contribute into your superannuation fund from your take home wages and also claim a tax deduction. This was previously only available to people who were salary sacrificing from their before tax pay into superannuation.

An example of how this works is if you put $20 a week into your superannuation from your take home pay, at the end of the year you will have approx an extra $900 in super being invested. You can then claim the amount you have put into super as a tax deduction. Depending on the amount of tax you pay, this should be between $190 and $450. So not only have you increased your super, you will be able to claim a deduction when doing your tax return.

The amounts you put into super are totally up to you as long as you do not go over $25,000 including your employers component in any one financial year.

Its easy to setup, just go to your superannuation funds website and contact them to get started. Most funds accept BPAY and Direct Debits. You can setup once off payments or ongoing payments, its up to you.

Please note that if you are currently salary sacrificing into superannuation then you are already accessing this option.

If you would like further information, please do not hesitate to contact me. If you find this of interest, please share with friends so more people can access this option

Please note everyone's situation is different so this option may or may not be beneficial depending on your personal circumstances.

Dawn Boyd

Connextion Accounting

Tax and Management Accountant

0414 814 618