End of Financial Year is fast approaching.
Yes, this is the time to hit the shops and save yourself some money in the sales. It’s also the last opportunity to make an extra after-tax contribution to your super before 30 June. If you do, you could be eligible to claim a tax deduction or receive a super bonus from the Government.
First things first. What’s an after-tax contribution?
After-tax contributions are money paid to your super that has already had tax taken out – like from your take-home pay. (FYI, ‘after-tax contributions’ are also called ‘non-concessional contributions’. Same thing, more syllables.)
So, how can you make an after-tax contribution that you could be rewarded for?
A boost from the Government – How it works
If you earn less than $56,112 and meet eligibility conditions , the Government will kick in some bonus super (known as a co-contribution) when you make an after-tax contribution. This will show up in your super account after you’ve lodged your tax return.
The amount you receive depends on how much you earn and contribute. Check out First Super’s webpage to see what your co-contribution could be for the 2021/22 financial year.
Get that tax-back life – How it works
Claiming a tax deduction for after-tax super contributions is particularly relevant if you’re self-employed and in charge of your own super contributions.
You’ll need to give your super fund a Notice of intent to claim or vary a deduction for personal contributions form before you make your after-tax contribution. And allow at least a week for processing this and your contribution.
There are some important things to consider before doing this.
- If you claim a tax deduction, you won’t get the co-contribution on that amount.
- There are limits on how much you can contribute to super, called caps. Contributions where you’re claiming a tax deduction will count towards your before-tax contribution cap.
- There are other eligibility rules – see the ATO website for details.
How to contribute extra to your super
You can pay extra into your super account using BPAY® or EFT. Your fund will have these details online – probably in your member portal. Or they’ll have a Contribution Form you can use. Ask them for help if you’re unsure what to do.
Give your super fund a call if you have any questions about making a contribution. And remember, you need to act before 30 June to scrape into this financial year.
If you’re living in Australia but you’ve got superannuation in New Zealand, why not bring it across the ditch to join you? First Super can help. They’re one of only a few funds that accepts KiwiSaver money – and there are no fees charged for this transfer service.
This is a sponsored advertising promotion by First Super Pty Limited (ABN 42 053 498 472, AFSL 223988) as trustee of First Super (ABN 56 286 625 181).
This document contains general advice which has been prepared without taking into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and read the Product Disclosure Statement before making any investment decisions. To obtain a copy of the PDS or Target Market Determination please contact First Super on 1300 360 988 or visit our website www.firstsuper.com.au.