Personal or after-tax contributions

You can make these any time you want straight out of your own pocket directly to your super fund. Or you can ask your employer to deduct money from your pay and pass it on to your fund. Depending on your income, these contributions may also qualify for the Government co-contribution, which can be a real bonus.

What are co-contributions?

If you earn less than $28,980, the Government will contribute $1.50 for every dollar you put into super up to a maximum of $1,500. If you earn above $28,980, the maximum co-contribution is gradually reduced and phases out completely at $58,980 a year.

So, an extra $20 into your super fund each week could give you the maximum co-contribution of $1,500 for the year.

Claiming the co-contribution is easy. Just make your contributions to your fund as you normally would. When you lodge your income tax return at the end of the financial year, the Australia Tax Office will calculate your co-contribution and automatically pay it to your super fund.

How do I salary sacrifice?

It’s simple. You make an arrangement with your employer to forego part of your salary and have the employer redirect it to your super fund. The contribution will be deducted from your pay before tax is taken out, reducing your taxable income. Your super fund will deduct 15 per cent contribution tax when it receives the contribution but you’ll still be ahead compared with the amount of tax that would have been taken out if you had received the money as income.

For example, you could take $100 of your pay and, after tax and the Medicare levy was taken out, you’d have $68.50 in your hand. If instead you salary sacrificed the $100 into super, $85 would go into your account after the contribution tax. So you’d be $16.50 ahead straight away.

I’m self-employed. How do I make contributions?

Superannuation is not compulsory for the self employed, but you’re still going to need the same amount of superannuation when you retire as someone who is employed. So it makes sense to contribute at least as much as the 9 per cent SG and more if you can.

If you’re self-employed — that is, less than 10 per cent of your income is from working for an employer — you can claim a full tax deduction on any contributions you make to super. Alternatively, you can claim the co-contribution if you qualify for it.

To claim a tax deduction, you need to advise your super fund of your intentions. They can then give you the necessary form to complete.

• Check out the Australian Tax Office website at or call the ATO superannuation info line on 13 10 20.

Further information

• Super 101
• Funds 101
• Boring things you want to know