The financial year is coming to an end and topping up your super could be an effective way for you to take advantage of the improving economy and invest in your future. Despite recent market conditions, superannuation is still a tax effective way to invest as earnings are taxed at a maximum rate of 15%. Here are some strategies for reducing your end of year tax bill and topping up your super.

Salary sacrificing
Contribute part of your pre-tax salary into your superannuation. In addition to increasing your super balance, your contribution will reduce your tax liability as your contribution is generally taxed at 15% instead of your usual marginal tax rate (up to 46.5% incl Medicare Levy). Salary sacrifice can be made from your salary, wages or a bonus but please note that it may reduce other benefits such as leave loading, holiday pay and Superannuation Guarantee contributions. You should also ensure before you make salary sacrifice contributions that you don't exceed the concessional contribution cap.

How to contribute: Speak to your employer about salary sacrificing into super. Your super fund will be able to provide details on ways the payment can be made, usually by EFT, BPAY or cheque.


Personal deductible contributions
If you are self employed (substantially self employed, or under 65 and recently retired), you may be able to reduce your taxable income and decrease your personal tax liability by making a personal deductible contribution to your super. Check your eligibility on making personal deductible contributions before making a contribution.

How to contribute: Speak to your super fund about making a personal contribution before 30 June and let them know the amount you wish to claim a tax deduction on. Generally this can be easily done via EFT or BPAY or by cheque.


Governmental co-contributions
The co-contributions scheme is an effective way to boost your super balance. For eligible investors, the government will match your personal contributions into a complying super fund by up to $1000. The amount you receive will depend on how much you earn in a year and how much you contribute. Check your eligibility for a super co-contribution by downloading the fact sheet below.

How to contribute: Speak to your super fund about payment options before 30 June. Generally this can be easily done via EFT or BPAY or by cheque. The ATO will determine whether you qualify based on the data they receive from your super fund (usually by 31 October) 


Spouse contributions
If your spouse's assessable income (including reportable fringe benefits) does not exceed $13,800 you might be able to receive a tax offset of up to $540 pa when making an after-tax contribution to your spouse’s super fund. Boost your spouse’s super savings while you reduce your tax liability. Note that you can split the lesser of 85% of their concessional contributions  and the concessional contribution cap in a financial year with your spouse.

How to contribute: Contact your super fund for a spouse contribution form. You will need the receiving spouse's superannuation fund details (including SPIN and member number), you may need to contact your spouse's superannuation fund and obtain their details if you do not have this information.


Important: Contribution caps
Eligible investors should note that caps and liits apply to how much you can contribute to super. The concessional cap is the limit set by the Government on the amount of pre-tax money that can be contributed to super and taxed at 15%. The actual contribution cap for the financial year 2009/2010 is limited at $25,000 when aged under 50 in this financial year and $50,000 if over 50 years old. Excess contributions above this cap will be taxed at a penalty rate of 31.5% in addition to a contributions tax of 15%. The non-concessional cap applies to super contributions such as personal after-tax contributions and spouse contributions received. The non-concessional cap is $150,000 per year or up to $450,000 provided your total non-concessional contributions for that year and the following two financial years does not exceed $450,000.


Next Steps

Most super funds offer quick and easy ways to make contributions to your super account using BPAY and EFT payments. Speak to your super fund before 30 June to take advantage of these strategies.

Did you know 2020 DIRECTINVEST offers a 100% entry fee rebate for all contributions to most superannuation funds in Australia?

If you already have a superannuation investment not through 2020 DIRECTINVEST you may be paying entry fees. Nominate 2020 DIRECTINVEST as your fund broker to receive rebates on all future entry fees on contributions without changing your investment.Simply complete the Fund Broker Nomination Form.

Factsheet: Superannuation Co-Contribution