Hello Mustachians and -ettes,
It is great to join your cult. I am new to the work force (late to the party) and relatively new to Australia. I don't understand how Super works, and how much I should be contributing pre-tax. Feel free to refer me to an accountant if you think that is more appropriate.
1. When you make pre-tax contributions to super, does that decrease your tax bracket for your remaining income? Or is that just being optimistic? (e.g.: You make 100k, and you contribute 10k pre-tax, does that drop the tax on your remaining take-home pay to $3,572 plus 32.5c for each $1 over $37,000.)?
2. If you exceed the contribution cap, it seems that they tax you at an atrocious rate (or they say they can). Do people aim to contribute just under this cap?
3. If you want to have cash flow for an investment, like a house, how much of a difference does it make to mortgage brokers if you have money in your Super v in your hands (excluding the deposit, of course).
4. If you are right on the cusp of an income bracket change (say 100k) wouldn't your cashflow improve by you making pre-tax contributions, because you aren't whacked with the $20,797 in tax? I think I'm gifting the government for my ignorance this year. . . . :(
Do they send you a tax form like in the US? I haven't seen one. . .