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Types of Superannuation Contributions.
Types of Superannuation Contributions.
There are enough different types of super contributions to make the giving of your money to super, both confusing and open to error. However, I wish to talk about only two types here. They derive their names based around how they are treated by the tax man (ATO).
If you make a contribution to your super fund before you pay your personal tax, that is through your employer (SGC), or salary sacrifice or a personal deduction, then the ATO will charge your contribution a tax of 15% instead of your personal tax rate which starts at (19% + 2% medicare). Because this "superannuation" tax rate is lower at 15%, it is called a "Concessional" contribution.
Non-Concessional Contribution.
If you make a contribution to your super fund after you pay your personal tax, then you have already paid taxes on the money going into your super at the higher rate of 19% plus more.
This contribution does not receive a special treatment from the government and so is regarded as a "non-Concessional" payment. The good news is the government doesn't charge any further taxes and the money goes into your super untouched by the ATO.
What are caps?
What are caps?
The government has placed limits or caps on the amounts of money you are able to deposit into superannuation. These links will give you more information on the difference between these contributions.
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