S.O.S Accounting - Tax Tips

Tax Tips


I have been contributing extra money to my superannuation account and have heard that there are changes to how much I can contribute.

From July 1, 2007 a limit of $150,000 per year will be placed on non-concessional contributions which are post-tax amounts that you have not claimed a tax deduction for. If you contribute more than the cap amount you will be taxed at the highest marginal rate plus Medicare (46.5%) on those excess contributions. There are transitional rules that apply to taxpayers who are nearing retirement.

I have been salary sacrificing money into my superannuation account. With the changes to Super coming in soon will that change how much I can sacrifice?

Amounts paid into super by your employer to meet the Superannuation Guarantee obligations and amounts paid under a salary sacrifice arrangement are called concessional contributions. From July 1, 2007 total annual concessional contributions will be capped at $50,000. If annual contributions exceed the cap amount, the excess will be taxed at the highest marginal rate, plus Medicare. There are transitional arrangements for taxpayers who are nearing retirement. For people turning 50 concessional contributions totalling $100,000 in the year they turn 50 and in future years until June 30, 2012 are able to be made.

I am over 60 years of age and retired. Will my superannuation pension be tax free in future?

If you are paid from a taxed superannuation fund, and most are, from July 1, 2007 you will no longer pay tax on that income. A taxed fund is one where contributions tax was paid on the contributions made by your employer into your super fund on your behalf. Contributions tax would also have been paid for contributions made under a salary sacrifice arrangement. However, for taxpayers who belonged to an untaxed super fund, they will still have to pay tax on their super pension, irrespective of their age.