Wondering how superannuation tax works? You’ve got questions, we’ve got answers.
Look, we know no one wants to think about their taxes… or their superannuation… but what if we told you that the combo of super + tax is actually quite exciting… Because you can actually pay less tax. Yep, you heard me.
Yes, they do. But not that much. Put simply, super contributions from your employer are taxed at a rate of only 15%. For most people, that’s less than your income tax rate.
But here’s the tricky part, the super contributions tax sitch for non-concessional contributions is a bit different. Non-concessional contributions are contributions into your super that have already been taxed.
If you’re a low income earner making $37000 or less each year, the government will actually give you a refund to compensate for the 15% tax you’ve paid on your super. It’s called the low income super tax offset and you don’t need to do anything to get it except make sure your super fund has your tax file number (TFN).
Sign up for Flux and join 100,000 members of the Flux family