Some opportunities to grow your super and retire with more may be available before and after 30 June this year.
Before 1 July 2017.
Maximise concessional contributions
Concessional contributions are taxed in the super fund at a maximum rate of 15% (or 30% for some people who earn a high income 3).
This tax rate in super is likely to be lower than your marginal tax rate of up to 49%4 that would be paid on salary or other sources of taxable income. In the current financial year, these contributions are capped at $35,000 pa if you were 49 years of age or older on 30 June 2016 and $30,000 pa for everyone else. From 1 July 2017, the cap reduces to $25,000 pa for everyone. If your cashflow allows, you may want to take advantage of the higher cap that applies until 30 June 2017.
3 Individuals with income above $300,000 (in 2016/17) will pay an additional 15% tax on personal deductible and other concessional super contributions. This income threshold will reduce to $250,000 from 2017/18.
4 Includes Medicare levy and, for 2016/17, the Temporary Budget Repair levy of 2% on taxable income exceeding $180,000. Resident marginal tax rates can be found at www.ato.gov.au
Owl Financial Management is an Adelaide Based Financial Advice business.