The contribution tax rate applicable depends on the employee’s salary level.
Non-concessional contributions and concessional contributions are the two types of contributions that can be made into a superannuation account.
An employer superannuation contribution is a classified as a concessional contribution, because the employer claims a tax deduction for the full amount of the contribution.
All concessional contributions are taxed at 15% upon contribution into a super fund. Non-concessional contributions do not incur any tax.
An additional 15% contributions tax is payable by higher income earners.
Employer Superannuation Contribution Tax Rate
The employer superannuation contribution tax rate is 15%. An additional 15% contributions tax is payable for individuals earning more than $250,000 per year.
The high income surcharge is enforced under Division 293 and is based on the employee’s adjusted taxable income from their individual tax return.
The additional Division 293 of 15% for high income earners doesn’t just apply to employer superannuation contributions, but applies to all concessional contributions received into the individual’s super account.
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Other types of concessional contributions include salary sacrifice contributions and personal concessional contributions (self-employed contributions).
Salary sacrifice contributions are technically employer superannuation contributions also, as this is an arrangement whereby the employee has made an agreement with their employer to forfeit part of their wage in exchange for increased superannuation contributions. Therefore, it is the employer making the contribution and claiming the tax deduction; with the employee, consequently, having a lower taxable income and greater super contributions.
Current Employer Super Contribution Rate
The current employer super contribution rate is calculated as a percentage of an individual’s salary, as follows:
|Financial Year||SG Rate|
An employer is required to pay their employee the current employer super contribution rate into the employees nominated super account. This payment must be made at least quarterly, as per the due dates set by the Australian Tax Office (ATO).
The SGC Superannuation amount should also be shown on the payslip of the employee.
Low Income Super Tax Offset
Individuals earning below $37,000 are eligible for a Low Income Super Tax Offset of between $10 and $500. This contribution is effectively a refund of the employer superannuation contribution tax rate.
The employer superannuation contribution tax rate is 15%. The Low Income Super Tax Offset is calculated as 15% of the concessional contributions made into a member’s super account by the member themselves, or their employer.
The Low Income Super Tax Offset is credited to the member’s super account balance provided they have supplied their superannuation fund with their tax file number. It is made after their personal tax return has been lodged for the relevant financial year.
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If you have reached your superannuation preservation age, it is possible to apply to have your LISTO paid into your personal bank account.
Low Income Super Tax Offset Calculator
The calculator below can help give you an indication of the Low Income Super Tax Offset contribution that you will receive.
The LISTO is calculated on your Adjusted Taxable Income, which includes your taxable income, reportable super contributions (not SGC), net investment losses, foreign income and tax-free government pensions. Click here to read more.
The ATO have developed a calculator to help you determine your LISTO. You can find the calculator here.