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Claiming a tax deduction for concessional contributions

Discussion in 'Superannuation, SMSF & Personal Insurance' started by JOHN SMITH, 2nd Jul, 2018.

  1. JOHN SMITH

    JOHN SMITH Member

    Joined:
    9th Apr, 2017
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    Location:
    Melbourne
    Hi All. I am wanting to clarify the tax deductibility of super contributions. Last financial year my employer and myself via salary sacrifice contributed 25k to my super account. My actual contribution was 16k. I know that my contribution is taxed at 15% but is my employer's also?
    In relation to my 16k less tax, am I able to claim a personal tax deduction against this concessional amount? Look forward to your responses. Thanks in advance. John
     
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  2. Terryw

    Terryw Well-Known Member

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    9th Jun, 2006
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    Location:
    Sydney
    Contributions are taxed going in at 15% - yours and the employers.
    You don't pay $16k less tax if you made a $16k contribution, you just earn $16k less income (if salary sacrifice) or have a $16k deduction if you make a deductible contribution
     
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  3. JOHN SMITH

    JOHN SMITH Member

    Joined:
    9th Apr, 2017
    Posts:
    20
    Location:
    Melbourne
    Thanks Terry for your reply.
    So the total going in is 21,250, which is 25k minus 15%.
    Therefore the deduction is gained by having less income remaining which is taxed at a lesser rate than what it would have been if all the money was added together and not salary sacrificed. Is this correct?
    Excuse my ignorance but this is part of my learning curve.
     
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  4. Terryw

    Terryw Well-Known Member

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    9th Jun, 2006
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    Location:
    Sydney
    Hi John, you should seek specific advice in relation to your situation, but it could be like this
    employer pays you $100,000 and you pay tax on $100,000

    or

    Employer pays you $80,000 with $20,000 paid into a superfund on your behalf
    You pay tax on $80k and the contribution to super is taxed at the 15%
     
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  5. AnthonyKing

    AnthonyKing Active Member

    Joined:
    30th Oct, 2010
    Posts:
    40
    Location:
    Sydney NSW
    Hello John and All
    There is IMO a better way - using a s221D income tax variation.
    Best get this application in place at the beginning of the tax year. or before.
    It allows you to estimate your deductions for super or interest or whatever and claim them each pay period so that at the end of the tax year your tax has been reduced to the correct amount and you have the use of the rebate cash on a regular basis.
    Warning!
    Your variation must be within 10% of the correct amount or you could face a penalty!
    Regards to All
    AnthonyK
     
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