If you have a bit of spare cash, why not put it in your super account? Not only will this give your balance a nice boost, but you could save tax by claiming your eligible after-tax contribution as a tax deduction.

After-tax contributions

With the end of the financial year in sight, now is the perfect time to learn about how making an after-tax contribution to super could save you tax. That’s because eligible contributions are taxed at only 15% instead of your PAYG rate.

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What’s the effect of the tax deduction?

Here are two case studies that look at how after-tax contributions of $2,000 and $5,000 could help you reduce tax. In both examples, a salary of $100,000 has been used. The after-tax contribution is claimed as a personal concessional contribution.

What could a $2,000 after-tax contribution that is claimed as a tax deduction mean to my a super balance and tax return?

Even though the net annual income is reduced, when you take into account the extra money put into super, the net benefit is $510. 

 

Without tax deduction

With  tax deduction

Salary (before tax)

$100,000

$100,000

Minus personal concessional contribution

$0

$2,000

Income tax¹ deducted

$26,117

$25,307

Net annual income

$73,883

$72,693

 

 

 

Extra money put into super

$0

$2,000

Super contributions tax²

$0

$300

Net increase to super

$0

$1,700

 

 

 

Better off (also the ”tax saving”)

 

$510

1. Including Medicare levy (ML) and the Low and Middle Income Tax Offset (LMITO)

2. Deducted when the ‘Notice of Intent to claim a tax deduction’ form is accepted by the super fund.

What could a $5,000 after-tax contribution that is claimed as a tax deduction mean to a super balance and tax return?

Even though the net income is reduced, when you take into account the extra money put into super, the net benefit is $1,275.

 

Without tax deduction

With  tax deduction

Salary (before tax)

$100,000

$100,000

Minus personal concessional contribution

$0

$5,000

Income tax¹ deducted

$26,117

$24,902

Net annual income

$73,883

$70,908

 

 

 

Extra money put into super

$0

$5,000

Super contributions tax²

$0

$750

Net increase to super

$0

$4,250

 

 

 

Better off (also the ”tax saving”)

 

$1,275

1. Including Medicare levy (ML) and the Low and Middle Income Tax Offset (LMITO)

2. Deducted when the ‘Notice of Intent to claim a tax deduction’ form is accepted by the super fund.

To claim a tax deduction for the current financial year, we need to receive your personal contributions by no later than Friday, 21 June 19.

To learn more about after-tax personal contributions, just click on the heading to get answers to the following questions:

Claiming a tax deduction for personal contributions

If you’re less than 65 years of age, you can claim a deduction for personal contributions regardless of your work situation. But remember there is a $25,000 annual concessional cap and if you’re between 65 and 75, you’ll need to meet the work test before you can make a personal contribution. To satisfy the work test, you need to have worked a minimum of 40 hours within 22 consecutive days during the financial year.

To claim a tax deduction for your personal contributions, you must complete a Notice of intent to claim a tax deduction for personal contributions form and send it to us.

You can either email your filled-out form to enquiries@firststatesuper.com.au  or post it to:
            First State Super
            PO Box 1229
            Wollongong NSW 2500

You should do this before you lodge your tax return for that year and before the end of the financial year following the year you made the contribution.

Once we receive your form, we can adjust the tax on your contribution to the lower rate of 15%. You will then receive a letter from us acknowledging that this has taken place. You must receive this acknowledgement before you can claim the deduction on your tax return.

To claim a tax deduction for the current financial year, we need to receive your personal contributions by no later than Friday, 21 June we we can process this for you in time.

Tip: If you intend to transfer or withdraw your benefit, make sure you send us your notice of intent form beforehand.

Ways to pay
BPAY

This is the quickest and easiest way to make a payment.

You have a unique customer reference number (CRN) depending on the type of contribution you want to make. Please note your CRN changed on 15 August 2016. This means you may need to update your bank records with your new details.

You can find your BPAY biller code and CRN by logging into your online account or you can call us on 1300 650 873 from Monday to Friday, 8:30am – 6:00pm (AEST/AEDT). 

Just enter the details into your online or phone banking the same way you would with a utility bill.

Remember, your CRN is a unique number and is different to your membership number. It helps us identify you and makes sure your money goes into your personal account.

Electronic funds transfer

You can pay by internet or phone banking using the following details:

Bank: Commonwealth Bank of Australia
Account name: First State Super
BSB: 062 000
Account number: 10226245

To account description: Use your First State Super member number plus the first six letters of your surname.

To ensure we are able to correctly identify your payment, you need to send us a completed Personal contributions by cheque or EFT form by post or email: cru@mercer.com

Direct debit

See our direct debit request form for more details.

Raiz

The Raiz app is like a virtual piggybank. Linked to your credit or debit card, the app rounds up the cost of everyday purchases and invests the difference for you. You can then use the money you save to boost your super by making a personal contribution from the app to your account using BPAY®.

Tell me more about Raiz

Don’t forget contribution limits apply

There is an annual cap on how much you can contribute into your super.

The current after-tax contribution cap is $100,000 annually or $300,000 over a three-year period if you are less than age 65. Transitional arrangements apply if you are already in a three-year period that started before 1 July 2017. Only people with a total superannuation balance of less than $1.6 million are eligible to make non-concessional contributions.

Amounts over these caps are known as excess contributions. If you exceed the cap, the Australian Taxation Office (ATO) will give you an opportunity to withdraw the excess amount from your super fund, along with 85% of the investment earnings. Any associated earnings withdrawn will be taxed at your marginal rate of tax, less a 15% rebate for tax already paid in the fund.

We can’t accept personal contributions without first receiving your tax file number (TFN) so please make sure we have it. You can provide your TFN by calling us on 1300 650 873 Monday to Friday, 8:30am – 6:00pm (AEST/AEDT).  

We are here with the right support and advice

As a member, you can speak to one of our super advisers over the phone at no additional cost.

Click here to book your appointment or you can call us on 1300 650 873 from Monday to Friday, 8:30am – 6:00pm. (AEST/AEDT).

Would before-tax (salary sacrifice) contributions be more suitable?

If your employer offers salary sacrifice, you can ask your payroll officer to make regular deductions from your pre-tax salary into your super. Eligible super contributions are taxed at 15% rather than your income tax rate, which could be as high 45%. 

I would like to find out more about salary sacrifice