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Super “Tax”? – “too much super” can mean “too much tax” Posted on October 9, 2018
There are 3 simple rules which should be considered prior to putting money into superannuation, so that you don’t end up paying “extra tax”.
In the current regulatory environment, it’s important that you understand these 3 quick rules to maximise your retirement savings.
RULE 1 – Your Age
The age of the individual who is receiving a contribution (deposit) into a superannuation fund has a major impact on how this money is treated.
There are tight rules on how much can be contributed to super, depending on your age. There are rules if you are over 50 and different rules if you are under 50. Not knowing the importance of this rule, has a big impact on how much tax you might be liable for.
RULE 2 – Your Timing
The timing of the contribution is critical because the government has strict rules on the amount of money which can be deposited into your superannuation fund during a period of time.
For people aged under 50, they can only have employer contributions of $25,000 a year. For people over 50 they can have employer contributions of $50,000 a year.
RULE 3 – Who is making the deposits
The final rule that should be considered, centres on “who” is putting the money into super for you.
Different rules surround how much an employer can contribute to your fund, versus how much you can contribute personally.
The Tax Office can impose extra tax on your superannuation savings where the above rules are not complied with.
If you are considering making additional contributions, you should seek professional advice to ensure you don’t pay extra tax on superannuation savings.
Click here to receive more information about the do’s and don’ts regarding your super.