Superannuation Lessons

I finally checked my superannuation account in a long time today, and it was strange to find some sort of fee which I hadn’t expected to see, e.g. ‘Contributions Tax’. A week or so ago I’d had to deal with an annoying phone call where they had insisted that I should have around 20K in super by now on my current salary - and I didn’t. Even with considering that there were different forms of employment in that time and it wasn’t the same salary (or same job) the whole time, I thought it was a bit strange that the figure was so low and took a look.

At first I thought I’d somehow been jipped of almost $1K in super, but after cooling off for a bit and doing some research, it seems evident now this is tax? It’s strange to me that we would be taxed on what is our retirement money, but I guess that should have been expected.

So here are some superannuation lessons/facts that I found out anyway, summarised without all the jargon flooding it and requiring you to download this PDF or jump to yet another page.

  • Employer superannuation contributions (concessional contributions) are 9.5% of ordinary time earnings
  • Employer and salary sacrificed contributions are taxed at 15% (unless income+super > $300,000, or no TFN (up to 49%))
  • If you earn $37,000 or less, this tax is returned to the super account through Low Income Super Contribution
  • Personal after-tax contributions are not taxed (max $30,000 including employer contribution)
  • Super calculated quarterly, and there is a cut off date. If not paid by the cut off date, employer pays a super guarantee charge to ATO. Charge includes shortfall amounts, interest at 10% p.a. and administration fee of $20 per worker per quarter. Employer misses out on tax deduction.