Making additional contributions to your super today is one of the best things you can do to help ensure your retirement years are comfortable.
There may also be tax incentives to adding a little extra into your super, so it’s important you understand how the tax rules work.
Understanding pre and post-tax contributions
There’s a few different ways you can add a little extra to your super. Most of these contributions will be classed as either ‘pre-tax’ or ‘post-tax’
Pre-tax contributions
Also known as concessional contributions, are contributed prior to your income being taxed. These include super being added by your employer (called Superannuation Guarantee) and salary sacrifice contributions. These contributions are subject to a super contribution tax of 15% (or 30% if your income is $250,000 or higher) which your super fund will automatically pay to the ATO on your behalf.
Post-tax contributions
Also known as non-concessional-contributions, are typically contributed with money that has already been taxed. These include personal-non concessional contributions as well as spouse contributions, and are not subject to a contribution tax.
There is a limit on the amount of pre and post-tax contributions you can deposit into your account each financial year, without tax implications – these are referred to as 'contribution caps'
Understanding the different contribution types
Depending on your situation, there are a number of different types of contributions you may choose to make to your super.
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Seeking advice
Prior to contributing to your account you may wish to seek financial advice. Our Helpline Advice team can provide financial advice about your super fund at no additional cost. You can make an appointment with this team by calling our Helpline on 1800 682 525 between 8am-7pm (AEST/AEDT), Monday-Friday.
Disclaimer: This document has been prepared and sent on behalf of Mercer Superannuation (Australia) Limited (‘Mercer Super’), ABN 79 004 717 533, Australian Financial Services Licence #235906, the trustee of the Mercer Super Trust ABN 19 905 422 981. Any advice contained in this document is of a general nature only, and does not take into account the personal needs and circumstances of any particular individual. Prior to acting on any information contained in this document, you need to take into account your own financial circumstances. Please consider the Product Disclosure Statement, Product Guide, Insurance Guide, and Financial Services Guide before making a decision about the product, or seek professional advice from a licensed, or appropriately authorised financial adviser if you are unsure of what action to take. 'MERCER' is a registered trademark of Mercer (Australia) Pty Ltd ABN 32 005 315 917. Copyright 2022 Mercer LLC. All rights reserved.