Author Topic: (Australia) - Super question  (Read 776 times)

Kitties are the best

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(Australia) - Super question
« on: March 01, 2017, 04:40:10 PM »
Hi Australian folk.

I'd like to pay a little extra into my super as I have a low balance for my age as I only moved here six years ago. At my previous job, I set up my employer to pay in a little extra to go into pre-tax. This was easy to set up and the salary sacrifice amount went in monthly.
I'm now working for a much smaller employer and things are much more ad hoc. I'm currently four or five months behind on my super and having spoken to other people who work for my employer, they do pay it but it's much more intermittent. I don't want to make waves about this but it's putting me off salary sacrificing extra as I'm not sure it will be done correctly or in a particularly timely fashion.
Do I have an option to pay extra into super from my post tax pay and then claim the tax back on my tax return in July? I do want to take advantage of the lower tax rates, if possible. I've had a look at the ATO website and ASICs MoneySmart but I haven't been able to ascertain this is possible.
Any advice gratefully received!

bigchrisb

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Re: (Australia) - Super question
« Reply #1 on: March 01, 2017, 05:48:14 PM »
Hi,

The super roles are changing next financial year, which means that people won't need to salary sacrifice, but anyone can make a tax deductible contribution.  Much easier, transparent and user-controlled than the archaic salary sacrifice situation.

Sadly, it only starts on 1 July, so for this year you are stuck with salary sacrifice and all the issues it has.

I've been caught by the timing of payments from my employer (the cap is based on when funds are received by the super fund, not when they are "earned").  Hence them being slow with a June payment resulted in me exceeding the yearly cap in the following year, and paying the penalty taxes.

Next year, wait until May, figure out how much headroom you have left in your $25k, send the money yourself to your super fund, and claim the tax deduction.

alsoknownasDean

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Re: (Australia) - Super question
« Reply #2 on: March 01, 2017, 06:48:10 PM »
Employers are generally meant to pay super on a quarterly basis. Follow up with your payroll officer.

https://www.ato.gov.au/business/super-for-employers/paying-super-contributions/

It's not even hard for them to do if they've got their shit together. If they're not doing it, I'd be worried about cash flow issues.

They're using an electronic payroll system, right?
« Last Edit: March 01, 2017, 06:50:31 PM by alsoknownasDean »

Kitties are the best

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Re: (Australia) - Super question
« Reply #3 on: March 01, 2017, 10:37:41 PM »
Thanks Chris - that's exactly what I needed to know. Great they are changing this for next year. Will encourage more people to post-pay. Shame the amount has been lowered so much.

On that note, I really wish the government would stop tinkering with super. It's a bit of a leap of faith to contribute extra when you're 20 odd years from the preservation age. But so tempting taking my tax rate down a bit!

And yes, Dean - fair warning on the cash flow issue. I do know we have lots of outstanding invoices but I think it's a case workload (the company is very small) rather than inability to pay super.

thanks for replying so quickly - I do love this community!

marty998

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Re: (Australia) - Super question
« Reply #4 on: March 02, 2017, 12:15:59 AM »
Super rules get tinkered with just as much or as little as any other tax rates.

People buy investment properties knowing full well CGT discounts could be removed in future, or land tax could be introduced and increased in 5 years time (meaning you pay double taxes - stamp duty then land taxes)

Governments need to tinker with Super because they are broke and need money and can't have a situation where the relatively wealthy get the largest tax breaks, when they don't even need the incentive to save to begin with.

Just don't worry about it. It's not the end of the world if concessional caps are moved by $5k here or there. You can still save outside super, which gives more flexibility and could have just as good an outcome if you retire to a low tax bracket.