Financial Tools
  Client Portfolio Access
  New Client Kit
  Enquiry / Seminar Registration
Hot Issues
Younger SMSF members
SMSF Specialist wanted
Aged Care
Crowd control
Philanthropy upswing
Market Update - 28th February 2014
Resources on our site to help you and your family.
SMSF investment process is broken, but a good financial planner can fix it
A behavioural barrier to successful saving
Spending of super lump sums
What the past can teach us about the current emerging turmoil
Some terms defined - Super & Investment
Spending control in a low-interest environment
Market Update - January 2014
The return of a resilient US
Putting financial literacy to the test.
No intention to retire
Outlook for Japan in 2014
Understanding Profit Metrics: Gross, Operating and Net Profits
Market Update - 31st December 2013
Articles archive
Quarter 4 October - December 2013
Quarter 3 July - September 2013
Quarter 2 April - June 2013
Quarter 1 January - March 2013
Quarter 4 October - December 2012
Quarter 3 July - September 2012
Quarter 2 April - June 2012
Quarter 1 January - March 2012
Quarter 4 October - December 2011
Quarter 3 July - September 2011
Quarter 2 April - June 2011
Quarter 1 January - March 2011
Quarter 4 October - December 2010
Quarter 3 July - September 2010
Quarter 2 April - June 2010
Quarter 1 January - March 2010
Quarter 4 October - December 2009
Quarter 3 July - September 2009
Quarter 2 April - June 2009
Quarter 1 January - March 2009
Quarter 4 October - December 2008
Quarter 3 July - September 2008
Quarter 2 April - June 2008
Quarter 1 January - March 2008
Quarter 4 October - December 2007
Quarter 3 July - September 2007
Quarter 2 April - June 2007
Quarter 1 January - March 2007
Quarter 4 October - December 2006
Quarter 3 July - September 2006
Quarter 2 April - June 2006
Quarter 2 of 2007
Articles
When sacrificing your salary isn't really a sacrifice
Debt - the dark cloud on the New Year's horizon
Secure File Transfer via our website
Register of Complying Superannuation Funds
Investment Markets Data - To 31st May 2007.
Tax cuts can turn super sexy.
Carrying on a business from home?
Choosing your DIY super investment strategy.
Market Update - General - April 2007
Investment Markets Data - To 30th April 2007.
Federal Budget 2007 - 2008
Tax cuts can turn super sexy.
Super opportunities for business owners.
The dangerous divide for our ageing population.
Market Notes - March 2007
Market Update - General - March 2007
Investment Markets Data - To 31st March 2007.
When sacrificing your salary isn't really a sacrifice

Salary sacrificing is a strategy that not only boosts your retirement savings but can also lower the amount of income tax you pay.


Many employers offer salary sacrifice, a strategy where rather than taking all your salary as income you contribute a portion to super. Salary sacrifice contributions usually attract a tax of just 15 per cent, which is about half the average marginal tax rate. Instead of investing money outside super and paying a higher tax rate, you can contribute it to super and have more money to invest for your long-term future.

You will need to make a prior arrangement with your employer before you can salary sacrifice. This means you must have an arrangement in place before performing any work. Ask your employer if you can make salary sacrifice contributions to your super fund. You may be able to contribute one-off payments like your annual bonus using salary sacrifice providing you make arrangements prior to your bonus being awarded.

Currently there are no limits to how much you can contribute to super and claim a tax deduction. However, age-based limits do apply to how much your employer can contribute and claim a tax deduction, which may impact how much you can salary sacrifice. These limits are based on age apply until 30 June this year.

Age

Deduction limit
(2006/07 financial year)

Under 35

$15,260

35 - 49

$42,385

50 to 70

$105,113

These limits will cease to apply from July 1 and caps will be introduced limiting the amount you can contribute to super and claim a tax deduction. Both your compulsory employer contributions and any salary sacrifice contributions you make will count towards this limit. From 1 July, People aged under 50 (including the self employed) can claim a full tax deduction of up to $50,000 for contributions made to super. For those over 50, this limit increases to $100,000 a year until 2012.

 

Smart Investing
By Robin Bowerman
11th May 2007

Principal & Head of Retail, Vanguard Investments Australia

 



24th-June-2007

  Financial Advisor | Financial Planner | Financial Adviser | Financial Planning | Financial Planner Sydney