While contributions from your employer are a great start, they may not be enough to provide the lifestyle you’re after when your working days are done. Extra contributions no matter how small can help set you on the path to a more enjoyable retirement.
1. Salary sacrifice contributions (from your before-tax salary).
Your employer can pay a portion of your before-tax salary to your super, instead of paying it to you. It’s an easy way to add to your super and potentially get tax benefits too.
By arranging for your employer to make salary sacrifice contributions on your behalf, you’re reducing your gross ‘taxable’ salary which means you’ll most likely pay less tax1. See how this works
Salary sacrifice contributions are generally taxed at 15%2 when they are paid in your super account (just like your employer contributions). So, they are most effective if your marginal tax rate is above 15% (taxable income over $18,200 p.a.)3
It doesn’t take much to make a big difference to your future and offset the impact of any career breaks.
Emma, Michelle and Sarah are aged 30, on a salary of $80,000 p.a. with a $50,000 super account balance. Michelle and Sarah each take three 12 month career breaks. Sarah decides to add an extra $1,500 p.a. to her super – by salary sacrificing, her take annual take-home pay is reduced by just $983 (or $2.70 per day).
No career breaks or extra contributions
Three career breaks and no extra contributions
Three career breaks & $1,500 p.a. salary sacrifice contributions
These are contributions you make directly to your super from your after-tax salary or savings. You may be able to claim them as an income tax deduction.
You can make payments either as a lump sum or by setting up a regular payment. You can do this directly from a bank account using BPay or you may be able to ask your employer to make regular payments as a payroll deduction from your after-tax salary.
If you’re under 65 or between 65 and 74 and satisfy the work test, you may be able to claim a tax deduction for any personal after-tax contributions you make to your super. This enables them to be treated in the same way as salary sacrifice contributions – taxed at 15% and subject to the $25,000 limit, including any employer contributions.
To claim a tax deduction, you’ll need to complete a Claiming a deduction for personal super contributions form. Before completing your tax return, you’ll need to wait until you receive acknowledgement from us of your intention to claim a tax deduction.
Contributions can be paid directly to your Mercy Super account from a bank account using Mercy Super’s BPAY Biller Code 344440 and your personal reference number, which you can find through Member Online or by contacting us.