Q: If I choose to salary sacrifice some of my income into my super account, is the 15% taxed separately on the salary sacrificed super, and then another 15% on amount my employer contributed, or are the two added together then the 15% tax deducted?
The contributions tax is generally deducted by the super fund upon entry of the super contributions into the super fund.
Usually the compulsory contributions are reported separately from salary sacrificed super contributions, but the tax is deducted collectively for ATO purposes. A super fund may choose to do its administration a different way, but it doesn’t change the outcome. For more information on the mechanics of salary sacrificing, see SuperGuide article Salary sacrifice and super: A guide for employees and employers.
Note that both salary sacrifice contributions, and Superannuation Guarantee contributions are treated as employer super contributions and are more broadly known as concessional contributions.
Tip: For information about the opportunity for employees to make tax-deductible super contributions (another form of concessional contributions), see SuperGuide article Employees can now make tax-deductible super contributions.
In relation to self-managed super funds (a special type of super fund with a maximum of 4 fund members), due to the time lag in paying tax to the ATO, and making the super contribution, SMSF trustees usually have access to the full super contribution for investment purposes, until tax is payable in the following financial year.
Note: Although 15% tax is generally deducted from concessional contributions, the amount of tax that a super account pays on those contributions may be partially or fully offset where a super fund receives franked dividends and the super fund can take advantage of franking credits when calculating tax payable. For more information about franked dividends, see SuperGuide article Franked dividends and franking credits: How do they work?.
Important: If you have an adjusted taxable income of more than $250,000 your concessional contributions will be subject to an additional 15% tax on concessional contributions. The additional 15% tax (Division 293 tax) is not deducted until the individual lodges an income tax return for the relevant financial year. For more information on this extra tax, see SuperGuide article Double contributions tax for more high-income earners.
For more Super for Beginners topics, see the following SuperGuide articles: