Personal contributions and salary sacrifice

A Financial Services Partners Adviser can help assess how personal contributions and salary sacrifice contributions can help you reach your retirement goals.

What are personal contributions?

If you make a personal contribution into superannuation from your after tax income (your take home pay), this is called a non-concessional contribution. However, there is a limit to the amount of non-concessional contributions you can make (currently capped at $150,000 per financial year).  If you are under the age of 65 on the 1st July, you can make a contribution in that financial year of up to $450,000 by bringing forward your caps for the next two years. The total of your non-concessional contributions for the three financial year period is limited to $450,000. 

Generally, you are not able to claim a tax deduction for personal contributions unless you are self-employed (sole trader or partnership), substantially self-employed or not working. You should seek specific tax advice to determine your eligibility for a personal tax deduction to superannuation.

Personal contributions may be suitable for people who:

  • wish to build retirement savings
  • are eligible to contribute to superannuation
  • have the capacity to save additional money
  • are comfortable that their superannuation savings are not accessible until they reach retirement (after preservation age).

Your Financial Services Partners Adviser can determine if making personal contributions is  right for you, after they consider your needs and objectives. They can also determine which other superannuation strategies can best meet your needs.

What are salary sacrifice contributions?

Your employer may allow you to 'salary sacrifice' into superannuation. This means you forego part of your cash salary and your employer pays this amount into your superannuation account instead. 

The amount sacrificed into superannuation is taxed at 15% instead of your marginal tax rate (provided you do not exceed your concessional contribution cap, which in the income year of 2011-2012 is $25,000*). The lower rate of tax means more money is available to invest for your benefit.

Apart from the tax concessions, salary sacrifice can be an effective way to save for your retirement. Contributions are automatically paid from your salary before you receive it, ensuring you have a regular savings pattern.

Salary sacrifice may be suitable for people who:

  • are employees and their employer allows salary sacrifice arrangements
  • wish to build retirement savings
  • are eligible to contribute to superannuation
  • have the capacity to save additional money
  • are comfortable that their superannuation savings are not accessible until they reach retirement (after preservation age).

Your Financial Services Partners Adviser can determine if making salary sacrifice  contributions is right for you, after they consider your needs and objectives. They can also determine which other superannuation strategies can best meet your needs.

Talk to us about how personal and salary sacrifice contributions might work for you

If you are ready to see how personal and salary sacrifice contributions can work for you as part of your superannuation strategy, we can match you with a suitable Financial Services Partners Adviser who will be happy to begin working with you to create a financial plan that's right for you.

To get started, please use our adviser matching service.

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