Join Australia's most dynamic and respected property investment community

Super Contributions.

Discussion in 'Accounting & Tax' started by Sonamic, 13th May, 2016.

  1. Sonamic

    Sonamic Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    954
    Location:
    Sunny QLD
    Hi all.

    Just switched from Casual back to Full Time PAYG. Whilst this has been a slightly healthier bonus to the pay packet working the same hours, reviewing the payslip reveals a $50 a week drop in Employer Contributions to Super. I understand it's because Casual Super is calculated on the hours worked and that full time Contributions are only calculated on 38 hours (I work 50+ hours a week, for now:p).
    My questions are, if I Contribute the $50 shortfall myself, are there any perks to this? Does this come out of gross or net pay? Are there any Co-contributions payable by Govt or Employer to match?
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,033
    Location:
    Sydney
    You could salary sac into super so your taxable income is $50 less per pay.
     
    Perthguy likes this.
  3. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,400
    Location:
    Sydney
    Employer super is a mandatory minimum of 9.5% of gross ORDINARY TIME earnings. ie not overtime.

    Casual employees are different.
    Aged 18 or over they are paid super only where they earn $450or more gross per calendar mth
    Aged under 18 same applies but they must work 30hrs in that month also.
    Superannuation basics for employers | Australian Taxation Office

    So in many cases employers with no idea or bad software underpay super for casuals. But in order to determine this you need to check the end of month payslip. It may adjust the apparent under accrued super.

    If in doubt ask your employer. It is part of your wages despite it being paid to a fund.

    Salary sacrifice is basically a way of switching say $50 a week of wages taxed at your normal rate for no tax paid by you. The $50 comes of gross wages and the employer pays it to the fund as an extra amount. It gets taxed at 15% like all employer contributions. So you save on tax and it boost savings. However if you pay it from after taxed pay it would go into the fund and not be taxed. At year end the govt may even give you an extra super contribution....Two different ways that may both help.
    Super co-contribution | Australian Taxation Office
     
    Perthguy likes this.
  4. Sonamic

    Sonamic Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    954
    Location:
    Sunny QLD
    Thankyou gentlemen.

    I think the extra $50 will go better towards reducing non deductible debt for a while.
     
  5. wogitalia

    wogitalia Well-Known Member

    Joined:
    28th Oct, 2015
    Posts:
    871
    Location:
    Perth
    Salary sacrifice is a better option if you're paying tax at a rate higher than 15% right now in most scenarios.

    Reducing the debt might be a better option though.
     
  6. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,385
    Location:
    Somewhere in the land of Oz
    Case of beer and some chips ;)
     
  7. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,579
    Location:
    Sydney or NSW or Australia
    You must drink extremely cheap beer @bob shovel
     
  8. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,385
    Location:
    Somewhere in the land of Oz
    I want going to suggest cask wine amongst such esteemed company!
     
  9. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,579
    Location:
    Sydney or NSW or Australia
    I hear that Aldi has a bottled wine which has a cork and it's almost as good as the cask stuff ;)
     
  10. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,385
    Location:
    Somewhere in the land of Oz
    Hmmm is the cork sold separately?
     
  11. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,579
    Location:
    Sydney or NSW or Australia
    Cork comes in the pack but you'll need a non-standard corkscrew which will set you back a little more.
     
  12. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,400
    Location:
    Sydney
    Wow in 40 years that might buy a beer
     
  13. Sonamic

    Sonamic Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    954
    Location:
    Sunny QLD
    In 40 years I'll be dead. I want to own my home well before then. And I don't drink beer.
     
    Last edited: 15th May, 2016