Understanding super contributions

The amount you have in your superannuation at retirement can mean the difference between a modest lifestyle or a more comfortable one with a few luxuries.

• Making extra payments from your before-tax salary may mean you access a tax rate of 15% (depending on your income level) instead of your marginal tax rate*.
• And you may be able to save for your retirement faster than relying on your Superannuation Guarantee contributions alone.

*Before-tax (concessional) contributions are generally taxed at a concessional rate of 15%. Note: an additional 15% tax may be payable for higher income earners.

A con­ces­sional con­tri­bu­tion is a pay­ment to su­per­an­nu­a­tion made be­fore tax and in­cludes the pay­ments your em­ployer might make on your be­half, for ex­am­ple Su­per­an­nu­a­tion Guar­an­tee. It also in­cludes ad­di­tional pay­ments you make your­self through salary sac­ri­fic­ing or for which you claim a tax de­duc­tion.

Con­ces­sional con­tri­bu­tions are taxed at a rate of 15%, in­stead of your mar­ginal tax rate*. The cap on concessional contributions is $25,000 per financial year.

A non-con­ces­sional con­tri­bu­tion is a pay­ment made to a su­per­an­nu­a­tion fund af­ter tax. It can be from a range of sources such as an in­her­i­tance, a prop­erty sale or even just ad­di­tional pay­ments from your af­ter-tax salary. The cap on non-concessional contributions is $100,000 per financial year or up to $300,000 using the three-year bring-forward rule for those aged under 65 years old.

*Be­fore-tax (con­ces­sional) con­tri­bu­tions are gen­er­ally taxed at a con­ces­sional rate of 15%. Note: an ad­di­tional 15% tax may be payable for higher in­come earn­ers.

To con­tinue to make con­tri­bu­tions, you will need to pass the work test – this means you will need to have worked 40 hours or more in 30 con­sec­u­tive days during the fi­nan­cial year.

To avoid exceeding the caps, the general before-tax con­tri­bu­tions cap is $25,000 per year while the af­ter-tax con­tri­bu­tions cap is $100,000 per year, pro­vided your to­tal su­per­an­nu­a­tion ac­count bal­ance is less than the trans­fer bal­ance cap (cur­rently $1.6 mil­lion and sub­ject to in­dex­a­tion). It is your responsibility to monitor your caps to avoid any additional tax that may apply if you exceed the caps. 

*Be­fore-tax (con­ces­sional) con­tri­bu­tions are gen­er­ally taxed at a con­ces­sional rate of 15%. Note: an ad­di­tional 15% tax may be payable for higher in­come earn­ers.

Before making contributions to your super, you’ll need to do the following:

• Consider your financial situation, what you can afford and what your options are so you can decide whether making extra super contributions is right for you across the short and long term. Bear in mind, there are government restrictions around when you can access your superannuation. If you have a financial adviser, it may be helpful to discuss this with them and the options available to you.
• Check your current and previous contributions across your superannuation (including if you have multiple accounts). If your super is linked to a Westpac or St.George account (like BT Super for Life), you will be able to check this by logging on to your online bank account or otherwise, call us on 132 135.
• Be aware of the caps on total contributions to your superannuation. 

If you would like to make before-tax contributions:

• If you are an em­ployee, talk to your em­ployer about your op­tions, such as whether they of­fer salary sac­ri­fic­ing from your pre-tax salary to your su­per­an­nu­a­tion, alternatively, you can claim a deduction for personal contributions; or
• If you are self-employed, you may be able to claim a tax deduction for contributions you make yourself to your superannuation. You may be able to claim a tax deduction for your financial year contributions, regardless of whether you are self-employed or otherwise. Visit ato.gov.au for the latest information on this.

If you would like to make after-tax contributions:

• Make your contribution by direct transfer or deposit if your bank account is linked to your superannuation account.
• Use BPAY to make your after-tax contribution. If you have a BT superannuation account, the instructions and codes for this are available here: https://www.bt.com.au/personal/help/use-bpay.html

Others can also make a contribution on your behalf. If you would like more information on how to do this or making a contribution yourself, speak to one of our superannuation specialists on 132 135.

Visit the following link:

• BT logins: https://secure.bt.com.au/help/log-in.asp

If your superannuation is linked to your Westpac Group bank account, other links include:

• Westpac Live: https://www.westpac.com.au/personal-banking/online-banking/
• St.George Online Banking: https://www.stgeorge.com.au/
• BankSA: https://www.banksa.com.au/
• Bank of Melbourne: https://www.bankofmelbourne.com.au/