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Types of contributions

There are two main categories of super contributions; concessional and non-concessional.

Concessional (before-tax) contributions

Superannuation Guarantee contributions

Generally, your employer is required to contribute a minimum of 9.5% of your gross salary to super on at least a quarterly basis. This is known as the Superannuation Guarantee. These contributions are made before any income tax is applied and taxed at 15%¹ when the contribution enters your super account.

Salary sacrifice

You may be able to negotiate with your employer to have them make salary sacrifice contributions to the Plan from your pre-tax salary. These contributions are generally taxed at 15%¹, which is less than the average marginal tax rate – making it a great way to boost your super and reduce your current taxable income.

Self-employed contributions These are personal contributions that you are allowed as an income tax deduction. You may be able to claim a tax deduction on contributions made before you turn age 75, if you meet certain tax legislation criteria and limits (for more information speak with your financial adviser).

Non-concessional (after-tax) contributions

Personal contributions

You can also make your own after-tax contributions to super² which may attract a Federal Government co-contribution. While you can’t claim a tax deduction on these contributions, because you will have already paid income tax on this money, generally, no extra tax is added when it’s contributed to super or when taken as a benefit (subject to your preservation age).

Low Income Superannuation Taxation Offset (LISTO)

People with an adjusted taxable income up to $37,000 will receive a LISTO contribution to their super fund. The LISTO will be equal to 15% of their total concessional (before-tax) contributions for an income year, capped at $500. The ATO will determine eligibility for LISTO and will advise funds annually of the offset (if any) to be applied to a member's account.

Spouse contributions

Contributing to super on behalf of your spouse can be a tax-effective way² for a couple to save for retirement – particularly if your spouse is only working part-time or has a limited income. There is no limit to the amount you can contribute, provided the contributions do not exceed non-concessional contribution limits.

Government Co-contributions

If your taxable income is $36,813 or less in the 2017-18 financial year and you make personal contributions to your super, the federal government will contribute up to $0.50 for each $1 you contribute, to a maximum amount of $500. For current income thresholds and contribution rates please refer to the ATO website

For further information about tax and super visit www.ato.gov.au/super

¹ Subject to the maximum concessional contributions cap. The standard cap is $25,000 for the 2017-18 financial year for all ages. Any contributions above this cap are included in your assessable income and taxed at your marginal rate (less a 15% tax offset).

² Subject to the non-concessional contributions cap. For the 2017-18 financial year, this cap is $100,000 per person per financial year subject to you having a total super balance, as at 30 June 2017 of less than $1.6 million.