The lead up to 30 June can be a good time to maximise tax benefits that may be available to you inside super.
With June 30 fast approaching, it’s time to start thinking about your super for another year. MLC have put together five smart strategies that may benefit you now and help boost your super savings.
| Strategy | This may be right if you … | How to use this strategy | The benefits may include |
| 1. Add to your super and get a tax deduction | Are employed, self-employed or earn taxable income from other sources (such as investments | Make an after-tax super contribution and claim a tax deduction | • Pay less tax on your income • Increase your retirement savings |
| 2. Get more from your salary or bonus | Are an employee | Arrange for your employer to contribute some of your pre-tax salary or a bonus into super, as part of a salary sacrifice agreement | • Pay less tax on your salary or bonus • Increase your retirement savings |
| 3. Convert your savings into super savings | Have money outside your super that you’d like to invest for retirement | Make an after-tax super contribution | • Pay less tax on investment earnings • Increase your retirement savings |
| 4. Get a super top-up from the Government | Earn* less than $54,838 pa from your job or business | Make an after-tax super contribution | • Receive a Government co-contribution of up to $500 • Increase your retirement savings |
| 5. Boost your spouse’s super and reduce your tax | Have a spouse who earns* less than $40,000 pa | Make an after-tax contribution into your spouse’s super account | • Receive a tax offset of up to $540 • Increase your spouse’s retirement savings |
* Includes assessable income, reportable fringe benefits and reportable employer super contributions. Other eligibility conditions apply.
Source: https://www.mlc.com.au/personal/end-of-financial-year/eofy-tips
While strategies can be an effective way to grow your super, always remember the Government imposes strict annual limits on the amount you can contribute to your super each year.
So, before you make any additional contributions, make sure you know much you’ve already added to your super account(s) during the financial year. And don’t forget, any additional contributions must be in your account before 30 June or they’ll be counted against the next financial year’s annual limits. From 1 July 2021, the federal government will increase superannuation contribution caps.
Current and Changes to Concessional and Non-Concessional Contribution Caps at a snapshot:
Concessional contribution cap
| Financial Years | Your concessional contribution cap |
| Current Financial Year from 1 July 2020 | $25,000 per annum |
| Next Financial Year from 1 July 2021 | Increase to $27,500 per annum |
Please note: The government has brought out that you can use your unused concessional contribution caps from the 2018/2019 financial year as long as your superannuation balance is under a certain amount for that financial year, you can check this via MyGov to see if you are eligible to take advantage of this.
Non-concessional contribution cap
| Financial Years | Your non-concessional contribution cap |
| Current Financial Year from 1 July 2020 | $100,000 per annum (or members under 65 years of age could make $300,000 of carry forward contributions depending on your eligibility – you will be unable to contribute for 3 years from the financial year initially contributed in) |
| Next Financial Year from 1 July 2021 | $110,000 per annum (or members under 65 years of age could make $330,000 of carry forward contributions depending on your eligibility – you will be unable to contribute for 3 years from the financial year initially contributed in) |
Please note: if an individual has triggered a bring forward arrangement before 1 July 2021, they will not have access to any additional cap space as a result of the increase to the non-concessional cap.
There are also other ways that you can boost your super, wealth, retirement plans and protect your assets and family; some of which may need swift action before the end of the financial year. To find out how you might make the most of these strategies, please contact our office to make an appointment as our end of financial year appointment spaces are quickly becoming booked up.
Just a reminder that each superannuation fund will have a certain cut off before 30 June for contributions to be made (i.e. contribution must be received by 25 June to ensure it is counted for this financial year) so be sure to be wary of this when looking to make contributions for this financial year.
Centaur Financial Services Pty Ltd is a Corporate Authorised Representative (CAR) of Australian Advice Network Pty Ltd. ABN 13 602 917 297, Australian Financial Service Licence holder number 472901. The advisers of Centaur Financial Services Pty Ltd provide financial services advice on behalf of the CAR as Sub Authorised Representatives of Australian Advice Network Pty Ltd. General Advice Warning: This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information. Investment Performance: Past performance is not a reliable guide to future returns as future returns may differ from and be more or less volatile than past returns.
