- Superannuation Guarantee (SG) – All Employers must pay at least the value of 9.5% (from 1 July 2014) of your wages/salary (not FROM your pay, but it’s another expense of the employer) to your member account in a super fund (including a self-managed super fund). This is a compulsory legal requirement under Superannuation Guarantee (SG) laws, for any employee earning over $450 per month and over 18 years old. These are known as Concessional SG Contributions (the employer gets a tax concession/deduction to claim as a business expense). (Formerly Deductible Contributions).
- Choice of Fund – All employees have Choice of fund – except for employment agreements and some industrial awards, you can choose the super fund you want your employer to pay super into. If you don’t choose your super fund, your employer chooses for you.
- Salary Sacrifice – Is where you instruct your employer to deduct some money BEFORE TAX from your pay and contribute that to your super fund with the 9.5% SG they need to pay. This is also a Concessional Contribution by the employer.
- Save Tax on Concessional Contributions – Your employer’s compulsory SG contributions and any before-tax contributions that you choose to make are both taxed at a maximum rate of 15 per cent on entry to the super fund. Compare earning $37,000 a year, who pays 19% tax above $18,000 – any $ earned over this will pay 32.5% for the 2014/2015 year) on earnings $37,001-$80,000. Put direct into super, instead of taking it home, will only result in paying 15% tax. See more detail of the rates at Individual income tax rates.
- Tax Rate on Investment Earnings. Earnings on your super fund’s investments are also taxed at no more than 15 per cent. And capital gains is 10% in SMSF situation.
Interested to know what self-managed super (SMSF) is all about, and if it is for you? Come to a FREE seminar with bonuses every month – Self Managed Super Fund Roadmap (all you need to know) for the next monthly event, see 1 SMSF – FREE Seminars or call us 0407 361 596