salary+sacrifice+-+super

= = =2017-2018 concessional super contribution = Super Guide

=Contributing extra to super = https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works/super-contributions/contributing-extra-to-super Super building blocks Making super contributions is a great way to boost your nest egg. You can build your super by making after-tax contributions from your own money or by salary sacrificing.
 * [|Salary sacrificing]
 * [|After-tax contributions]
 * [|Government co-contributions]
 * [|Low income super contribution]
 * [|Getting the most out of your super contributions]

Salary sacrificing
You've probably heard someone talking about 'salary sacrifice' at your family barbeque. But what does it actually mean? If you earn more than $37,000, salary sacrifice can be a good way to grow your super. It involves giving up some of your pay and putting it into your super instead. You will save tax and boost your super. Salary sacrificing is when you ask your employer to redirect a portion of your pay as a contribution to super. By 'sacrificing' some of your before-tax salary and putting it into your super fund, you get taxed at the special rate of 15%. That's why it's also known as 'concessional contributions' because there are tax concessions with these types of contributions. This suits higher income earners due to their higher [|marginal tax rate].

Super concessional caps
There is a limit on how much you can put into super each year by salary sacrifice. Most people can contribute up to $30,000, including your employer's 9.5% super guarantee contribution. This is called the concessional contributions cap. <span style="background-color: #ffffff; color: #222222; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">There are higher concessional caps for people closer to retirement, people aged 50 and over can contribute $35,000 including your employer's 9.5% super guarantee contribution. <span style="background-color: #ffffff; color: #222222; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">For more details see the ATO's information on [|key superannuation rates and thresholds]. <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">

Case study: Crystal boosts her super by salary sacrificing
Crystal earns $90,000 before tax, excluding her employer's super contribution. If Crystal decides to redirect $10,000 of her pay into salary sacrifice super contributions, she will save $2,400 in tax, with the extra money going into her super fund. Assumptions: The figures used in this table are estimates only and are based on 2015/2016 income tax rates and a Medicare Levy of 2%.
 * ~ Crystal's boost ||~ Does nothing ||~ Salary sacrifices $10,000 ||
 * Take-home pay || $66,953 || $60,853 ||
 * Tax || $23,047 || $19,147 ||
 * Extra money into super || $0 || $8,500 ||
 * Net benefit || $66,953 || $69,353 ($2,400 better off) ||

<span style="background-color: #ffffff; color: #333333; font-family: arial,sans-serif; font-size: 1.3em; vertical-align: baseline;">Setting up salary sacrificing
<span style="background-color: #ffffff; color: #222222; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">If you want to sacrifice some of your salary to super you should enter into a formal agreement with your employer. It is best to include the details in your terms of employment. This ensures your employer calculates their 9.5% super guarantee contribution on your original salary. <span style="background-color: #ffffff; color: #222222; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">See the ATO for more details on [|salary sacrifice arrangements for employees]. <span style="background-color: #ffffff; color: #222222; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">You can also read our webpage on [|salary packaging].

<span style="color: #336699; font-family: arial,sans-serif; font-size: 1.6em; vertical-align: baseline;">After-tax contributions
<span style="background-color: #ffffff; color: #222222; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">After-tax contributions are known as 'non-concessional contributions' because you don't receive a tax deduction. After-tax contributions are the simplest way to add to your super as you simply deposit your personal money into your super account. <span style="background-color: #ffffff; color: #222222; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">If you can spare the money, you can really boost your super savings by making after-tax contributions. You will usually save more by investing through super than by investing in the same <span style="color: #000000; font-family: inherit; font-size: inherit; text-decoration: none; vertical-align: baseline;">[|assets] outside super. <span style="background-color: #ffffff; color: #222222; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">Contributions from your after-tax income don't get taxed when your fund receives them because you have already paid tax. <span style="background-color: #ffffff; color: #222222; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">However, there are limits to how much you can contribute to your super before you have to pay tax. See the Australian Taxation Office's information on [|super contributions - too much super can mean extra tax]. <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">

Video: What happens if you go over the super contributions caps?
Making extra contributions is an effective way to grow your super. But what happens if you go over the contribution caps? Watch this video from the ATO to find out. [|Transcript: What happens if you go over the super contributions caps?]

<span style="color: #336699; font-family: arial,sans-serif; font-size: 1.6em; vertical-align: baseline;">Government co-contributions
<span style="background-color: #ffffff; color: #222222; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">If you earn less than $51,021 per year (before tax) and make after-tax super contributions, you are eligible to get matching contributions from the government. This is called the government co-contribution. <span style="background-color: #ffffff; color: #222222; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">If you earn less than $36,021 the maximum co-contribution is $500 based on $0.50 from the government for every $1 you contribute. And just like that - you've made a 50% return on your money! The amount of the co-contribution reduces the more you earn. <span style="background-color: #ffffff; color: #222222; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">To find out how much free money you can get, use our super co-contribution calculator. <span style="background-color: #ffffff; color: #ffffff; font-family: inherit; font-size: inherit; text-decoration: none; vertical-align: baseline;">[|Super co-contributions calculator]

<span style="background-color: #ffffff; color: #333333; font-family: arial,sans-serif; font-size: 1.3em; vertical-align: baseline;">How can I get the government co-contribution?
<span style="background-color: #ffffff; color: #222222; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">To receive the co-contribution you will need to lodge a tax return for the year. <span style="background-color: #ffffff; color: #222222; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">The government will then work out how much you are entitled to. Assuming you're eligible, the government will pay the co-contribution directly to your fund. See the ATO for more details on [|super co-contributions]. <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">

Case study: Jay gets a co-contribution from the government
Jay, 40, earns $28,000 a year from his part-time job. He decides to pay an additional $40 per fortnight into his super fund. This small but regular step will grow Jay's super significantly over time. In addition, he qualifies for a super co-contribution from the government. By the time Jay retires at 65, these additional amounts have boosted his super by thousands of dollars.

<span style="color: #336699; font-family: arial,sans-serif; font-size: 1.6em; vertical-align: baseline;">Low income super contribution
<span style="background-color: #ffffff; color: #222222; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">If you are eligible and earn $37,000 or less per year, the government may make a further contribution to your super. This amount, up to $500 annually, will be 15% of the before-tax contributions you or your employer made to your super account during the financial year. <span style="background-color: #ffffff; color: #222222; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">You don't need to apply - the ATO will work out your eligibility and it will be paid directly into your super account. Make sure your super fund has your <span style="color: #000000; font-family: inherit; font-size: inherit; text-decoration: none; vertical-align: baseline;">[|tax file number] so you don't miss out on the payment. If you are eligible, you will receive the payment whether or not you lodge a tax return. However, if you don't lodge a tax return the process will take up to 14 months. <span style="background-color: #ffffff; color: #222222; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">See the ATO's information on the [|low income super contribution]. <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">

Case study: Ewan gets a low income super contribution from the government
Ewan, 26, earns $36,000 a year from his job as a personal trainer. Over the last financial year Ewan's employer puts $3,420 into his super account. Because Ewan provided his tax file number to his super fund the ATO is able to work out that he is eligible for a low income super contribution from the government. After Ewan lodges his tax return the government adds $500 to his super account. <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> Salary Packaging Frequently Asked Questions How much can I salary package? The Australian Taxation Office has given you a capped limit on the amount you can salary package each fringe benefits tax (FBT) year. The FBT year starts on the 1st April and ends on the 31st March each year.

Employees that work for a Not-for-Profit Public Hospital the capped limit is $9,009.95 ($17,000 grossed-up) per FBT Year. This works out to be $346.50 per fortnight.

Employees that work for a Public Benevolent Institution the capped limit is $15,899.90 ($30,000 grossed-up) per FBT Year. This works out to be $611.50 per fortnight.

What can I salary package under the capped limit? Employers offer a select range of benefits to their employees. It is best to contact your HR department to determine what is offered by your organisation. Generally capped limit benefits are regular living expense payments you make; such as:

Mortgage repayments, rent payments, personal loan repayments, council or water rates and school fees. These are the most common expenses salary packaged under the capped limit.

The grossed-up value of all capped limit benefits are reported on your Payment Summary at the end of the financial year.

maximising

http://www.faa.net.au/salary_packaging_rent_or_mortgage.html#Top <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;">

<span style="color: #666666; font-family: Georgia,serif; font-size: 16px;">Are you eligible?
<span style="color: #666666; font-family: Tahoma,Geneva,Verdana; font-size: 11.52px;">This all depends on who you work for. If your work is based within a Hospital or your employer is a Not-for-Profit Organisation, then you may be eligible to package your Rent or Mortgage. The first step is to find out if you are able to salary package your living accommodation. You can do this by speaking to your employer, but they may not even know that they can offer you this benefit at no cost to them. The next step is to book an appointment to discuss your situation and to ensure that you have set up the correct salary packaging in your best interest and that all available benefits are maximised.
 * Here is an example: **

<span style="color: #666666; font-family: Tahoma,Geneva,Verdana; font-size: 11.52px;">Jane, Jack and Anna are all on the same income but are employed by different companies.

<span style="color: #666666; font-family: Tahoma,Geneva,Verdana; font-size: 11.52px;">Jane is unable to package her rent at all while Jack and Anna are able to, but due to their employers they are able to package different amounts each year. <span style="color: #666666; font-family: Tahoma,Geneva,Verdana; font-size: 11.52px;">** As you can see from the example above, Jack has saved himself $3,060 and Anna has saved herself $5,440 over the year. ** As your income increases so do the savings that you receive by Salary Packaging. <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"><span style="color: #666666; font-family: Tahoma,Geneva,Verdana; font-size: 11.52px;">FBT concession examption Cap <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"><span style="color: #666666; font-family: Tahoma,Geneva,Verdana; font-size: 11.52px; line-height: 0px; overflow: hidden;"> <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> http://www.eclipseaccounting.com.au/meal-entertainment-fbt/ journal entry for employee entitlement
 * ||= Jane ||= Jack ||= Anna ||
 * Gross Income ||> $55,000 ||> $55,000 ||> $55,000 ||
 * Less Salary Packaged Expenses (eg: Rent) ||> — ||> $9,000 ||> $16,000 ||
 * Taxable Income ||> $55,000 ||> $46,000 ||> $39,000 ||
 * Income Tax ||> $9,442 ||> $6,497 ||> $4,222 ||
 * Medicare Levy ||> $825 ||> $690 ||> $585 ||
 * Net Pay (per Annum) ||> $44,753 ||> $38,813 ||> $34,193 ||
 * Minus Expenses (eg Rent) ||> $16,000 ||> $7,000 ||> — ||
 * ** Net Disposable Income (per Annum) ** ||> ** $28,753 ** ||> ** $31,813 ** ||> ** $34,193 ** ||
 * Net Disposable Income (Fortnightly) ||> $1,106 ||> $1,224 ||> $1,315 ||

<span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> <span style="background-color: #f4f3f0; color: #444444; font-family: Georgia,Times,serif; font-size: 28px;">Do you cash out fringe benefits

http://www.grantthornton.com.au/client-alerts/2015/fringe-benefits--hidden-fbt-and-deemed-dividend-issues/ <span style="background-color: #f4f3f0; color: #666666; font-family: Arial,Helvetica,sans-serif; font-size: 1.6em;">When a family business operating through a private company provides benefits to employees who are also shareholders, it is common for the benefits to be ‘cashed out’. That is, the taxable value of benefits (and therefore any FBT liability) is reduced to nil by employee contributions. Such contributions are often made by way of an accounting journal entry, being a debit to the shareholder loan account (representing the amount owing by the employee to the company) and a corresponding credit to the profit and loss statement. This methodology is accepted by the ATO as resulting in a valid employee contribution, so there should be no problem. However, we have identified on a number of occasions, scenarios where insufficient care was taken with the calculation of taxable value, with some unexpected consequences. Just because the benefit is being ‘cashed out’, doesn’t mean that the employer is absolved from proper due diligence on the FBT calculations. In particular, where the calculation of a benefit’s taxable value for FBT purposes was incorrect, the amount loaned to the employee to cover the employee contribution will also have been incorrect. If the taxable value was understated, insufficient employee contribution will have been received. This could result in a number of adverse outcomes, including: <span style="background-color: #f4f3f0; color: #666666; font-family: Arial,Helvetica,sans-serif; font-size: 1.6em;">So, when it comes the time for preparing accounts and recording loans for employee contribution amounts, think about whether your FBT calculations and related policies are adequate. An FBT review can still be relevant even when you are ‘cashing out’ the benefits and don’t plan to lodge an FBT return – it might save a different kind of tax problem in the future.
 * <span style="background-color: #f4f3f0; color: #666666; font-family: Arial,Helvetica,sans-serif; font-size: 1.6em; font-size: 10px;">FBT could be payable in relation to the remaining taxable value, plus interest
 * <span style="background-color: #f4f3f0; color: #666666; font-family: Arial,Helvetica,sans-serif; font-size: 1.6em; font-size: 10px;">The loan provided might actually have been higher than recorded and a deemed dividend problem might arise where the repayment schedule is inadequate for the higher amount; and
 * <span style="background-color: #f4f3f0; color: #666666; font-family: Arial,Helvetica,sans-serif; font-size: 1.6em; font-size: 10px;">GST may have been underpaid in relation to the additional employee contribution amount

<span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"> <span style="background-color: #ebf1bf; color: #222222; display: block; font-family: arial,sans-serif; font-size: 12.96px; vertical-align: baseline;"><span style="background-color: #f4f3f0; color: #666666; font-family: Arial,Helvetica,sans-serif; font-size: 1.6em;">FBT expense reimbursement example