Putting extra into your super

By law, your employer is required to contribute at least 9.5% of your Ordinary Time Earnings (OTE) into your super account. However 9.5% may not be enough to provide for your retirement. To keep retirement savings on track, you can make extra contributions to super.

How can I make extra contributions?

1. Salary sacrifice for super

Salary sacrifice is an easy way to make extra payments into your super.

Your employer agrees to redirect a portion of your before-tax salary into your super account. It’s generally worthwhile considering if your income is over $37,000.
 

The benefits of salary sacrifice

Lower tax rate

If you make super contributions through a salary sacrifice, these contributions are taxed at a maximum rate of 15%.

When super is paid from your pre-tax salary, your taxable income is lowered. And the higher your tax bracket, the less tax you pay on the money that’s salary sacrificed to super.

Super growth

Over time, you’ll enjoy the benefit of compounding returns in your super fund. And as your account grows over time you’ll see how even a little extra contribution now, can mean a lot to your savings at retirement.

Why salary sacrifice

How can I set up a salary sacrifice?

Salary sacrifice is an agreement between you and your employer.

Simply print and complete our Salary sacrifice form (PDF) and submit it to your employer.
 

Tips for setting up salary sacrifice for superannuation
Super contribution limits

A salary sacrifice arrangement may affect your existing salary-based entitlements. Employers may base their super contributions on your reduced salary amount. It’s a good idea to check first, before deciding to salary sacrifice.

Limits on contributions to super

There are limits to the amount you can contribute to your super. Your ability to make extra contributions may also be restricted by your age, your employment status and how much you've already saved in super (your total super balance).

The table below shows the limit on before-tax contributions and includes both your normal super payments, plus your additional salary sacrificed amounts and any personal contributions you claim a tax deduction for.

 

Age Limit for before-tax (concessional) contributions
Under 65
Up to $25,000 a year
65 to 74
Up to $25,000 a year if you meet the work test
75+ You cannot make extra contributions

These limits apply for the 2017/18 year. Amounts above the caps trigger additional tax. Before-tax contributions above the cap that are not withdrawn will count towards your after-tax contributions cap.

Keep track of your total super balance

Your total super balance (across all super accounts you hold including income streams) can impact your ability to make or receive certain contributions and the tax rates that apply.

Once your total super balance reaches $1.6 million* the tax rates on contributions increase and you won’t be able to receive the Government co-contribution or tax offsets for spouse contributions.

* Limit for the 2017/18 financial year. Some amounts are excluded from the calculation of the balance (e.g. personal injury compensation amounts that qualify as structured settlements). Contact us for more information.

TAX DEDUCTIONS

Since your contributions are made by your employer, you can’t claim a tax deduction for any sacrificed amount.

Salary sacrificed amounts are included as reportable super contributions that count toward certain income tests used for working out benefits, concessions and offsets.

FRINGE BENEFITS TAX

A salary sacrifice contribution is not a fringe benefit, so it’s not subject to fringe benefits tax. It shouldn’t be reported on your PAYG payment summary.

Further reading

You can read more about salary sacrifice by clicking on the links below.

2. Top up my super

Grow your super faster by making personal payments into your account

You can pay money that’s already been taxed, straight into your super account. If you have a little extra from your take home pay, additional savings or an inheritance, you can make non-concessional contributions to boost your superannuation.

You may also be eligible to receive the Government Co-contribution.   

Why top up your super

Four easy ways to make a personal contribution

Super payment limits

There are limits to how much you can put into your super as after-tax (non-concessional) contributions.  

Age Limit for after-tax (non-concessional) contributions
Under 65 Up to $100,000 per year, or up to $300,000 over a 3 year period
65 to 74 $100,000 a year if you meet the work test
75+ You cannot make extra contributions

These limits apply for the 2017/18 financial year. Your total super balance also affects these limits.

 

Tax file number (TFN) requirements

To accept personal contributions from you, Cbus needs your TFN.

Update your TFN online, via your online account, or call us .

 

If you’re over 65, you need to pass the work test

For those aged between 65 and 74, there are Government restrictions on making personal contributions to your super account.

To be eligible to make personal contributions, you must pass the ‘work test’. This means you need to have worked for at least 40 hours within 30 consecutive days, in the financial year you made the contributions. Keep in mind that any unpaid work, such as volunteering, can’t be considered for the ‘work test.’

Government co-contribution

To encourage personal contributions into your super account, the Government offers extra contributions to give your balance a boost.

Within the limits on non-concessional contributions, you can contribute any amount you like to your super fund. The more money you put in, the higher the Government contribution, up to a $500 maximum.

After you've made your personal contribution and lodged your tax return for the year, the Government will automatically pay your super co-contribution direct into your super account.

It’s tax-free, so any benefit you receive will go directly towards building your super.

For every $1 of after-tax contributions you make, the Government will contribute an extra 50 cents to your super, up to a maximum of $500.

Am I eligible?

To be eligible to receive the Government co-contribution you must:

  • be a permanent resident of Australia and under 71 at the end of the financial year
  • make a personal contribution to your super and not claim a tax deduction for it*
  • ensure your 'total income' is less than $51,813 for the 2017/18 financial year
  • lodge a tax return for that year of income
  • have supplied your TFN to Cbus
  • have a total super balance of less than $1.6 million* at the end of the previous financial year
  • not have contributed more than your after-tax (non-concessional) contributions cap

*Employer or salary sacrifice contributions do not count as personal contributions.
10% or more of your total income must be from employment related activities, such as working as an employee, running a business, or a combination of both.

Government co-contribution for $1,000 after-tax contribution
Your total income Government co-contribution
$36,813 or less $500
$42,813 $300
$48,813 $100
$51,813 or more $0

Total income is your assessable income, plus reportable employer super contributions and reportable fringe benefits. Figures are for the 2017/18 financial year. For more information visit the ATO website.

3. Spouse super contributions

If you make a contribution to your spouse’s super account, you may be eligible for a tax offset of up to $540 per financial year. The tax offset applies when specific criteria is met, including your spouse earning less than $40,000 or not working.

Your spouse can make a contribution to your Cbus account to be eligible for the same tax offset of up to $540 per financial year. Again, the tax offset applies when the criteria below have been met.

Is your spouse eligible?

Your spouse may be entitled to claim a tax offset if:

  • he or she did not claim a tax deduction for the contributions
  • both you and your spouse were Australian residents when the contributions were made
  • you and your spouse were living together on a permanent basis when contributions were made
  • your assessable income and total reportable fringe benefits were less than $40,000 per year
  • your spouse has not exceeded their after-tax (non-concessional) contributions cap and their total super balance is less than $1.6 million for the 2017/18 financial year
  • the contribution was made to a complying super fund, such as Cbus.

Download our Spouse contributions form (PDF).

4. Low income super tax offset

If you earn $37,000 or less, you’ll automatically receive a contribution tax rebate of up to $500 paid into your super fund.

Am I eligible?

To receive the low income super tax offset (LISTO) you must:

  • be a permanent resident of Australia
  • have an adjustable taxable income of up to $37,000 per year
  • earn 10% or more of your total income from employment or business related activities
  • have made before-tax (concessional) contributions for the year to a complying super fund like Cbus.

How will I receive the offset?

When you lodge an income tax return for the financial year, the Australian Tax Office (ATO) will work out your eligibility for the LISTO.

Visit the ATO website for more information on the Low income super tax offset.

 

We’re here to help

Call our Cbus Advice Team on 1300 361 784

Press 4 to be connected

8am to 8pm Monday to Friday AEST/AEDT

Email: advice@cbussuper.com.au

Or use our online form to book a time for our Advice Team to call you.