Services Prices Tax Records Super Company Setup FamilyAssist Sole Trader Start a Business Rental Property

SUPERANNUATION CONTRIBUTIONS
 

From 1 July 2018

EMPLOYERS - SUPERANNUATION GUARANTEE

Employers usually contribute 9.50% of ordinary time earnings to your superannuation fund and then claim a tax deduction.

Employees must be over 18 years old (75 year old age limit from from 1 July 2016) and you pay $450 or more in salary or wages in a month.

Employees under 18 years old must also work at least 30 hours per week. Employers must make these payments on 28th day after each quarter or pay a superannuation guarantee charge which includes the 9.50% superannuation plus interest plus an ATO administration fee.

Ordinary time earnings:

Includes - ordinary hours of work, over-award payments, certain bonuses, commissions, shift-loading and certain

allowances.

Excludes - Unused sick leave, unused annual leave, unused long service leave, overtime payments or lump sum

payments relating to overtime and specific loadings.

These are called concessional contributions.

The governments has announced that a low income superannuation support will be provided via a payment of up to $500 a year, meaning no effective tax is paid on compulsory super contributions for employees earning up to $37,000 per year.


SELF EMPLOYED SOLE TRADERS AND PARTNERSHIPS

Self employed sole traders and partnerships can claim a tax deduction up to $25,000.

These are called concessional contributions.

 

From 1 July 2018

SALARY AND WAGES EMPLOYEES POST TAXED CONCESSIONAL CONTRIBUTIONS

Removal of the < 10% of total assessable income test.

This means that salary and wage employees may contribute up to $25,000 limit in post taxed dollars and receive a tax deduction.

Previously you were only able to salary package extra superannuation concessional contributions or make a non-concessional contribution with post taxed income.


CONCESSIONAL CONTRIBUTIONS ANNUAL CAP $25,000

Concessional contribution cap is $25,000 for all individuals.

Some individuals with a superannuation balance of < $500,000 may make additional pre-tax contributions where they have not reached their cap in the previous 5 years (from 1 July 2017).

Division 293 tax

Your superannuation fund pays a 15% contributions tax to the ATO for all concessional contributions. If your income is > $250,000 you will pay 30% contributions tax.

Low income superannuation support

Will be provided via a payment of up to $500 a year, meaning no effective tax is paid on compulsory super contributions for workers earning up to $37,000 per year.

 

EXCESS CONCESSIONAL CONTRIBUTIONS

If you exceed the concessional contributions cap, any excess concessional contributions will be included in your assessable income and taxed at your marginal tax rate, rather than the excess concessional contribution tax rate of 31.5%.

To reduce your tax liability, the ATO will apply a 15% tax offset to account for the contributions tax that has already been paid by your super fund provider.

You may elect to withdraw up to 85% of your excess concessional contributions from your superannuation fund to help you pay your income tax assessment.

 

EXCESS CONCESSIONAL CONTRIBUTION CHARGE

This charge is payable on the increase in your tax liability for the year you have excess concessional contributions.

The relevant charge period is calculated from the start of the income year in which the excess concessional contributions were made. It ends the day before the tax is due to be paid under your first income tax assessment for the year that includes the excess concessional contributions.

The ECC charge rates are updated quarterly

July - September 2018       4.96%

April - June 2018                4.77%

January - March 2018        4.72%

October - December 2017  4.70%

July - September 2017       4.73%

April - June 2017                4.78%. 

January-March 2017         4.76%

October - December 2016  4.76%

July - September 2016       5.01%

April - June 2016                5.28%

January - March 2016        5.22%

October - December 2015  5.14%

July - September 2015       5.15%

April - June 2015                5.36%.

January - March 2015        5.75%.

October - December 2014  5.63%.

July - September 2014       5.69%.



From 1 July 2018

Transition to Retirement:

The tax exemption on earnings of assets supporting transition to retirement income streams will be removed.

 

 Non Concessional Contributions Cap (NCC)

• a reduced annual non-concessional contributions cap (NCC).

• eligibility changes referring to a client’s total super balance and general transfer balance cap

• government co-contribution linked to the annual NCC cap and/or total super balance.


Reduced annual NCC cap

The annual NCC cap reduces to $100,000 (from $180,000) and the maximum bring forward cap is lowered to $300,000

(from $540,000).

 
Eligibility changes Individuals must have a total super balance less than the general transfer balance cap on 30 June of the

previous financial year to be eligible to make NCCs in the relevant financial year.

This criterion is to be met in addition to the existing age and work test requirements.

 
General Transfer Balance Cap

From 1 July 2017

For the 2017-18 financial year, the general transfer balance cap is $1.6 million.

 


NCC contribution eligibility:

Clients under 65 are eligible to make NCCs at any time.

Clients who are 65 years of age or over at the time of contribution are eligible to make NCCs if they are not yet 75 and have

met the work test.


1 Indexed in $100,000 increments in line with the Consumer Price Index (CPI).

2 Contribution can be made by member and must be received by trustee no later than 28 days after the end of the month

that the member turns 75.

3 Gainfully employed for at least 40 hours over 30 consecutive days during the financial year.




 


Disclaimer
The information provided in the above documents is not intended to be, nor should it be construed as tax advice.
Any specific recommendation for a client can only be done after their individual circumstances have been determined by David Douglas Accountants.

We have clients from the following locations:

Brisbane, Albion, New Farm, Teneriffe, Newstead, Windsor, Wilston, Bowen Hills, Wooloowin, Herston, Lutwyche, Hamilton, Eagle Farm, Gordon Park, Fortitude Valley, Clayfield, Ascot, Hendra.

Morayfield, Burpengary, Caboolture, Bellmere, Wamuran, Narangba, North Lakes, Mango Hill, Kallangur, Dakabin, Deception Bay, Bribie Island, Elimbah, Kippa-Ring.

We do tax returns for individuals, trusts, companies, partnerships, contractors, ABNs and sole traders.

Liability limited by a scheme approved under Professional Standards legislation