From tax on super lump sums to the transfer balance cap, there are a range of rates and thresholds that can affect your super. In this article we provide an overview of the key aspects of each of these rates and thresholds for 2019/20.
Building a sizeable retirement nest egg can take some effort, but a recent study by Roy Morgan found only 18% of employees with super currently have more than the compulsory 9.5% of their salary or wages going into their super fund account.
Retirees are always looking for new ways to boost their retirement income or to pay for expenses, like home care. Although downsizing to a small home can be one option, the Pension Loans Scheme (PLS) offered by the federal government is a rarely considered alternative.
For some retirees, selling the family home can also be a great way to release built-up equity and make an extra contribution to their super account.
The Low and Middle Income Tax Offset (LMITO) helps low and middle income earners lower the amount of tax they need to pay. Because it is a tax offset, it can only be used to lower the amount of tax that you owe and not to generate a tax refund or pay your Medicare Levy.
Learn the Australian income tax rates for 2019/2020 and previous years, as well as details on how income tax is calculated, deductions, offsets and levies.
The Low Income Tax Offset (LITO) means working Australians can earn up to $20,452 before they need to pay any income tax. It was introduced by the Government in 1993. Because it is a tax offset, it can only be used to lower the amount of tax that you owe and not to generate a tax refund or pay your Medicare Levy.
The Personal Income Tax Plan which provides targeted tax relief over seven years for low and middle income earners and protects middle income Australians from bracket creep consists of three steps.
You can make contributions into your super account from your take home pay or money outside the super system. Since these contributions have already been taxed before you contribute them to your super account, they are not treated concessionally and are called non-concessional contributions.
Although it can be difficult getting your head around all the different types of super contributions that go into your super account, concessional contributions are the ones you are mostly likely to have and are pretty straightforward to understand.
Although it sounds complicated, bring-forward contributions are just what they sound like – you bring forward your non-concessional contributions caps from future years and use them in a shorter time period.
It’s getting harder to pocket a tax refund these days, so when the Government is offering one for your super contributions, it’s worthwhile knowing just how you much you are likely to get.
For most high income earners, saving for your retirement through super is a sensible strategy, but you need to watch you don’t fall foul of the dreaded Division 293 tax.
The SG rate is 9.5% of your earnings up to a limit called the maximum super contribution base (MSCB). The current MSCB is $54,030 per quarter, which equals a maximum SG contribution of $5,132.85 per quarter.
One of the simplest ways to get free money from the government is to invest a few extra dollars into your super account and take advantage of the co-contribution scheme.