Superannuation is important when planning for your future. There are so many types of super contributions and payments, that it’s sometimes confusing and hard to know what each of them are. One part that people often don’t understand is reportable superannuation contributions. Let’s take a look at what you should know…
What are reportable superannuation contributions?
Reportable super contributions are extra payments that your employer makes into your super. It’s different to the regular super payments every employee in Australia receives. They include payments made as salary sacrifice, bonuses, and extra payments made as part of your salary package negotiated with your employer.
- Contributions made through a salary sacrifice agreement
- Additional payments from your employer, such as bonuses you ask to be paid into your super instead of your bank
- Amounts greater than the compulsory super payments, as negotiated within your salary package.
What are non-reportable contributions?
Not all super contributions need to be included on your tax return. There are some types of contributions that are called non-reportable contributions. They are:
- All compulsory super contributions
- Contributions over and above the compulsory super payments, from a negotiated industrial agreement for all employees (eg under an industrial award)
- Contributions made from your after-tax income.
It’s important to understand the difference between reportable and non-reportable contributions since the rules and requirements aren’t the same.
Are employer superannuation contributions taxed?
Employer super contributions are not taxed at your individual tax rate with the rest of your income, but is automatically taxed at a rate of 15% by your chosen super. However, you do need to include the super payment information on your tax return.
Benefits of additional employer superannuation contributions
Some types of reportable superannuation contributions, such as salary sacrifice, can offer several benefits:
- Tax Savings: Salary sacrifice contributions are made before tax is calculated, which could reduce your overall taxable income.
- Boosted Retirement Savings: These additional contributions can significantly enhance your retirement savings, helping you achieve your financial goals sooner.
- Compounding Growth: Superannuation contributions have the benefit of compounding over time, potentially leading to a more substantial retirement ‘nest egg’.
How do I include reportable superannuation contributions on my Etax return?
With Etax, it’s easy to include your reportable super contributions on your tax return. Here’s how to do it:
- Create or login to your Etax Account
- Navigate to the section called “Salary or Wages”
- Answer “Yes” to “Are there other items on your Income Statement?”
- Select “Reportable Superannuation Contributions” and enter the amount on your Income Statement.
Once your return has been completed and signed, our accountants will make sure everything is correct and make suggestions based on your occupation. If you have any questions about how to complete this section of your tax return, send us a message on the Live Chat function in your tax return.