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Date of article: 2006
Last updated: N/A

Ways to maximise your super

Make additional contributions

It may be tempting to spend the money today but additional contributions to your super makes a whole lot of difference to your final balance. Even small amounts contributed on a regular basis.

You can make pre-tax contribution by salary sacrifice to grow your super. This can reduce the tax you pay, because contributions into your super are taxed at only 15 per cent versus your marginal tax rate.

Investing your tax cuts through salary sacrificing »

What's more, you may be eligible for co-contribution from the government, if you make after tax contribution into your super, where the government will match your extra annual contribution up to a certain limit if your income is below a certain amount.

Consolidate you super

Consolidating your super into one fund (such as your own self managed superfund) will not only reduce the paperwork but:

  • you can keep better track of your super (no unclaimed or lost super)
  • you may save money by paying one set of fees

Minimise your costs

Some super funds are more costly than others. The less you pay in fees, the more your super can be invested and over time this can make a huge difference. Self managed superfund is a very cost effective way to grow your super faster.

Investing your tax cuts through salary sacrificing

Many people, with their employer’s agreement, can sacrifice a part of their salary in return for their employer putting the sacrificed amount into their superannuation. This can result in a reduction of the total amount of income tax you pay, because these contributions are taxed at only 15%. This is lower than your marginal tax rate.

How much tax can you save?

How much salary can be sacrificed?

There is no limit to the benefits that can be sacrifice. However, there is a tax deduction limit your employer can receive, based on your age. Any superannuation contributions made on your behalf over these limits will not be deductible. Because of this, your employer might not want to allow any salary sacrifice amounts over the relevant age-based limits.