Grow your super
Topping1 up your super is a great way to accelerate your savings, take advantage of tax concessions and other government incentives and turn on the turbo power of compounding interest.
Topping1 up your super is a great way to accelerate your savings, take advantage of tax concessions and other government incentives and turn on the turbo power of compounding interest.
Here’s how it works. You ask your employer to deduct an extra amount from your regular pay and put it into super (for most of us there’s a current maximum of $25,000 for all before-tax contributions, including superannuation guarantee (SG), and any additional contributions made by your employer). As this amount comes out of your before-tax pay it’s not part of your assessable income for taxation purposes. You may get a very nice tax break AND you’re squirreling away that extra money where it will be invested –to grow instead of frittering it away on….stuff.
Over the course of your ‘working week’ this can make a huge difference to your ‘weekend’.
When you top up your super with money that’s already been taxed – e.g. from your take-home pay or from your bank account – this money isn’t taxed on the way into super. And here’s the kicker, tax benefits introduced in 2019 could make your top ups tax deductible. It’s another great way to grow your super – and remember, a little more squirrelled away today could mean a lot more for you on the ‘weekend’ .
To see what works best for you – before-tax, after-tax or both – try the government's
super contributions optimiser or ask a smartCoach.
Contact a smartCoach today on 1300 262 241, or email smartcoach@smartmonday.com.au.
Without it we can’t accept your after-tax top up. Your Personal Home Page will tell you whether we have your TFN or not, and it also has a link so you can easily add it if we don’t.
Log in and you'll see how easy it is.
If you’re not working or if you earn less than $37,000 a year, after-tax top ups your partner makes to your super may give them a tax offset of 18 cents for each dollar they contribute up to a maximum of $3,000 – that’s a total offset of $540.
Spouse contributions can be beneficial for both parties – helping one build a bigger nest egg while potentially providing tax benefits to the other. Eligibility criteria do apply so to see if this is a good option for you, see our Spouse contribution factsheet for all the details.
TIP: it might work the other way around – with you contributing to your partner’s super.
If you are 65 years or older, you may consider selling the family home and downsizing – often for a tree change or sea change. If you’re eligible to take advantage of a Downsizer Contribution you can top up your super with a lump sum of up to $300,000 from the proceeds. This strategy allows you to bypass the contributions cap and get a large amount of money into the tax-advantaged world of super.
If you are considering a Downsizer Contribution, we recommend checking the rules and your eligibility on the ATO website.
1 Superannuation can be complex, for more details about contribution rules and limits and their tax treatment, please see the smartMonday Product Disclosure Statement, Tax Super and Privacy Reference Guide.
2 Pay-as-You Earn tax (PAYE), is a withholding tax on income payments to employees. Amounts withheld are treated as advance payments of income tax due and are submitted directly to the Australian Tax Office (ATO) by the employer. Australian tax law allows voluntary contributions to superannuation to be made from an individual’s salary prior to withholding tax (PAYE) on that salary being calculated. However, there are limits on the total amount of voluntary contributions that can be made to your superannuation account each year. Contributions paid in ‘pre-tax’ dollars are subject to a 15% contribution tax at the time they are paid into your super account.
3 The Downsizer Contribution is only applicable for the sale of your principal place of residence, which you must have owned for at least 10 years. Your downsizer contribution does not count towards your contributions cap and can still be made even if you have a total super balance greater than $1.6 million. It will count towards your transfer balance cap, currently set at $1.6 million. This cap applies when you move your super savings into retirement phase. You must be 65 years or older to make a downsizer contribution.
