Access tax deductions
and GROW Super
Simultaneously
Two hot topics for most Australians are
maximising personal income tax deductions and
growing their retirement nest egg.
rior to July 2017, employees generally couldn’t claim a tax deduction for any personal super
contributions. Alternatively employees were able to salary sacrifice superannuation from their pre-tax
income. Before July 2017, salary sacrifice arrangements gave scope to arguably unscrupulous
P
employers to deduct the mandatory 9.5 percent super guarantee from the sacrificed amount resulting in a
reduced salary package.
Legislation changes post July 2017 are a windfall for employees wishing to contribute more into super.
Employers no longer have the option of deducting super guarantee amounts from salary sacrifice payments
ensuring their salary is maintained, we provide an example below:
Description Pre 1 July 2017 Post 1 July 2017
Salary $80,000 $80,000
Salary Sacrifice $5,000 $5,000
Mandatory Super (9.5%) $2,600 ($80,000 x 9.5%) - $5,000 $7,600 ($80,000 x 9.5%)
Total Super Contribution $7,600 $12,600
Total Salary Package $82,600 $87,600
In addition to the above, legislation changes also allow employees to contribute post-tax contributions into
super and receive a tax deduction provided certain conditions are met. Previously this additional deduction
was reserved for the self-employed. The additional contributions may be eligible for the government co-contribution
further bolstering super balances. The government co-contribution is a government initiative
providing additional superannuation contributions up to a maximum amount of $500 based upon your
income and amount contributed.
The above must be considered with reference to the concessional contribution cap available each year.
Talk to your accountant today about opportunities you may have for growing your superannuation and
maximising income tax deductions.
Element Business & Accounting Solutions are authorised to provide financial superannuation advice through our wholly owned subsidiary, Element SMSF & Advisory Pty Ltd (authorised through the SMSF Advisers
Network Pty Ltd), including advice on establishing self-managed superannuation funds, contribution strategies and pension strategies. With our practical and straightforward advice, and experienced team, we are
the perfect solution to help businesses navigate today’s ever-changing economic landscape.
96 Pindara Magazine ISSUE 14 | 2018