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10 Superannuation

Contributing to Superannuation

There are a number of ways that the Australian Government encourages us to save for retirement:

  • For most employees their employer is required to contribute 9.5% equivalent of their salary each year as a mandatory Super Guarantee contribution (this is gradually increasing to 10% in 2021/22, with 0.5% increases each financial year thereafter until it reaches 12% in 2025/26, where it will subsequently remain);
  • Certain individuals may be eligible to claim a tax deduction on contributions they make to superannuation;
  • Certain individuals may be eligible to receive a government co-contribution when they make certain personal contributions to superannuation;
  • Contributions can be made by a spouse, for which the contributing spouse may be eligible for a tax offset; and
  • Investment earnings and certain contributions are taxed at a concessional rate of up to 15% (contributions tax increasing to 30% for those individuals with incomes over $250,000), which may be lower than the individual's marginal tax rate.
  • Individuals with low levels of income may have tax on contributions refunded.

Remember, your super is intended to be there for your retirement. If you do contribute additional money to super, it is important to expect that this money will need to remain in the super fund environment until your retirement (and unable to be withdraw until a condition of release is met).

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