Ever wonder about how you can better prepare yourself for retirement? If you earn less than $46,920, you may be able to give your super a nice boost – with very little sacrifice! Read on to find out how you can take advantage of the Federal Government’s superannuation co-contribution scheme.
What is it?
The superannuation co-contribution scheme means that on top of your employer putting a percentage of your income into your super fund, you can also add a little extra.
Here’s the magical part: The government will pay you $0.50 for every dollar you contribute up to a maximum of $500 per year!
To be eligible you must make your contribution from your after-tax income to your super fund before the 30th June each year to be eligible.
There are a couple of ways you can go.
- The most popular way our clients take advantage of superannuation co-contribution: Ask your employer to take an extra $40-$80 per month out of your after-tax salary and deposit it into your super fund. This is only $10 or $20 per week and it’s hardly noticeable once you get started.
- Or if you prefer, you can add a lump sum deposit to your super fund in one go.
No matter which method you choose, these small contributions can make a massive difference to your wealth later in life, because the government adds up to $500 per year on top of your own contributions.
What if I’m self-employed?
If you are self-employed you may also be able to make a claim for personal superannuation contributions you make to your super fund up to a certain amount. This varies depending on your individual circumstances and your contribution must be made by June 30 of each year. Send us an email on [email protected] and one of our accountants can provide you with further information based on your personal circumstances.
My income is greater than $46,920: Am I eligible for Superannuation Co-Contribution?
If you earn more than $46,920 then ask your employer about how you can salary sacrifice some of your pre-tax income into your super fund instead. This will reduce your taxable income on your PAYG certificate meaning you pay less tax. This is because the amount sacrificed does not appear as income and therefore the amount of tax you pay decreases.
Want more information?
If you would like help working out how you can benefit from the super co-contribution scheme or more information about salary sacrificing please contact us by phone or email.
*The Government co-contribution is up to $500 for incomes up to $31,920. For every dollar earned over $31,920 and up to $46,920 you should subtract 3.33 cents from the amount the Government will match.