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.
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.
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.
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.
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.
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.
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 Before-tax contributions above the cap that are not withdrawn will count towards your after-tax contributions cap.
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.
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.
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.
You can read more about salary sacrifice by clicking on the links below.
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.
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.
To accept personal contributions from you, Cbus needs your TFN.
Update your TFN online, via your online account, or call us .
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.’
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.
To be eligible to receive the Government co-contribution you must:
*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.
| 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.
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.
Your spouse may be entitled to claim a tax offset if:
Download our Spouse contributions form (PDF).
If you earn $37,000 or less, you’ll automatically receive a contribution tax rebate of up to $500 paid into your super fund.
To receive the low income super tax offset (LISTO) you must:
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.
You can read more about super contributions by clicking on the links below.
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Email: advice@cbussuper.com.au
Or use our online form to request a call from Advice Services.
Read our Financial Services Guide (PDF)
