Super and tax

Super is a compulsory savings vehicle that people sometimes take for granted.  But super can also be a tax-effective way of saving for your future.

Super can provide several ways to potentially save on your tax bill. Super can be one of the most tax effective ways to build up a nest egg so it's worth understanding how you might benefit from some of these strategies.

Reduced tax on your salary

If you're earning over $45,000, the personal tax rate on some of your salary is 32.5%. Generally, super is only taxed at 15%. By putting extra money into your super you can potentially lower your taxable income, save on the tax you pay and boost your super.

Learn how salary sacrifice could help you pay less tax

Tax free payments over 60

Once you turn 60, you pay no tax on the super lump sum benefits you withdraw or your super pension payments. 

RetireAccess pays you a salary in retirement

Tax rebates for boosting your spouse's super

If your spouse earns below a certain income and you put some money into their super, you may receive a tax rebate.

Find out how to qualify for a tax rebate

Tax-free super boosts by the Government

Co-contributions may be paid to people who make post-tax contributions into super and earn below a certain income.

Learn more about co-contributions

Tax for high-income earners

If your taxable income is higher than $250,000 a year, you’ll pay 30% tax on your pre-tax contributions.

If your income is less than $250,000 a year but when you add in pre- tax contributions it’s above $250,000, the 30% tax rate will apply to that part of your pre -tax contributions that are over $250,000. For example, if your income is $230,000 and your pre -tax contributions are $25,000, the 30% tax rate only applies on the $5,000.

Tax effective investment earnings

Investment earnings within super or in a Transition to Retirement (TTR) income stream are generally taxed at a maximum of 15%. 
If you have a Retirement income stream the earnings are tax-free. If you have investment earnings outside super, they may be taxed at your marginal tax rate.

Tax refunds for low income earners

The government refunds contribution tax for low income earners. The Low Income Super Tax Offset (LISTO) is a government superannuation payment of up to $500 to help low-income earners save for retirement. If you earn $37,000 or less a year, you may be eligible to receive a LISTO payment directly into your super fund.

Tax deductions for personal contributions

 Individuals under 75 (including people aged 67 to 74 years who meet the work test or work test exemption) are eligible to claim a deduction for personal super contributions made to an eligible super fund. Amounts you claim as a tax deduction are classified as pre-tax contributions which count towards your pre-tax (concessional) contribution limit.

Find out how to claim a tax deduction

Need help developing a tax effective strategy?

At TelstraSuper we’re here to help you build a secure financial future. TelstraSuper Financial Planning has a team of phone based Advisers who can provide you with simple advice to help you work out how to maximise your tax savings through super. If you’d like to discuss growing your super or if you have any other financial advice queries contact us on 1300 033 166 or fill in our online contact form. There's no additional cost for our phone based advice as this is included in your TelstraSuper membership.

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