Get more super. Pay less tax by whitecheese

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									Get more super.
   Pay less tax.

    The how and why of salary sacrificing
               your super contributions.
What’s in this guide?
How does salary sacrifice work?                                 2
Even $20 could make a difference.                               4
Have you had a pay rise lately?                                 5
Work out how much you can boost your super by.                  6
Do you already pay money into super?                            8
Why pay more into super?                                        9
Frequently asked questions.                                 10
What next?                                                  13

  Throughout this guide we use examples of people
  with annual salaries of $80,000 to $180,000, and over
  $180,000. That’s because these are levels at which
  income tax rates change.

  Your income                        Your top tax rate*

  Up to $6,000                       Nil
  $6001 – $35,000                    16.5%
  $35,001 – $80,000                  31.5%
  $80,001 – $180,000                 39.5%
  Over $180,000                      46.5%
  Salary sacrificing can still be effective if your salary is
  less than $80,000 p.a., though the amount of tax you
  can save is reduced.

  * Including Medicare levy of 1.5% for 2009/2010.
Like to know how to
pay less tax?
No matter what stage of your working life you are at,            Ever thought
it’s always a good time to be thinking about how to boost
                                                                 to yourself,
your super. Relying on the 9% your employer pays into
super for you is unlikely to give you the kind of retirement     “I really should
you’ll want to leave work for. To really get your super to
build up you should top up your savings yourself.
                                                                  start building
If you earn more than $80,000 p.a. then paying your               up my super”
own money into super through salary sacrifice is likely to
be very tax effective for you. Even if you earn less than
$80,000 p.a. salary sacrifice can still be an effective way to
boost your super.
By salary sacrificing money into super you will pay less
tax. And less tax means more for you! You’ll effectively be
getting the Government to help you save by paying money
into your super rather than paying it to the Government in
income tax.
Can you afford to miss out on this opportunity?

                        How does salary
                        sacrifice work?

      “Because your     Your employer is required to pay 9% of your salary
                        into a super fund for you.
employer is paying in
 this money for you,    You can also pay your own money into super to make
                        it grow even faster. You can pay money in either
you don’t have to pay   before, or after, you have paid income tax.
   income tax on it”
                        “After tax” payments are called voluntary contributions
                        and these come out of money you have earned and
                        paid income tax on — the money in your pay packet.
                        So, depending on your income that could be as much as
                        31.5%, 39.5% or even 46.5% of what you earn, gone in
                        tax (including Medicare levy).
                        Before tax payments are called “salary sacrifice” payments
                        and these amounts go into your super fund without you
                        having to pay any income tax on them at all — that’s right, 0%!
                        However, you will pay 15% super contributions tax on this
                        money when it goes into your super fund.
                        With a salary sacrifice payment you agree with your
                        employer to accept less money as salary, in return for them
                        agreeing to pay that amount into your super for you instead.
                        Because your employer is paying in this money for you,
                        you don’t have to pay income tax on it. And, your employer
                        continues to pay your 9% super contribution — salary sacrifice
                        amounts are paid on top of that.

                           UP TO
                         46.5%            YOU        >> AFTER TAX >>
                        INCOME TAX

     YOUR                                                                YOUR
     EMPLOYER                                                            SUPER
                           SUPER               >> SALARY SACRIFICE >>

 Get more super, pay less tax.
 Here’s an example: Meet Mike...

                         Mike does     Mike salary
                          nothing    sacrifices super

Mike’s weekly salary
          before tax
                         $1,600        $1,600
                                                        Mike’s super gets
 Salary sacrifice Mike                                  $28 more a week
arranges with his work
                          —               $33           (after $5 contributions
                                                        tax is paid)

          Income tax                                    Mike pays $13
        (including the    $391           $378           less income tax
        Medicare levy)                                  every week

    Mike’s take home                                    Mike’s $28 in
                         $1,209         $1,189          super has only
       weekly salary
                                                        cost him $20

 For $20 a week Mike gets almost
 $1,500 more super and pays
 over $400 less tax every year.

                              Even $20 a week can
                              make a difference
                              Do you think you would miss $20 a week? Would that make
                              much difference to your lifestyle? By doing without that
                              $20 each week and salary sacrificing into super, you could
                              be more than 40% better off.

1: I earn between $80,000 and $180,000.

       Ask your            Reduce your           Your super
                                                                        You’re in
      employer to          weekly take-           account
                                                                        front by:
    salary sacrifice:      home pay by:           picks up:

    $33 week                 -$20                +$28                   40%

After 10 years an extra $28 into super each week
could be worth an extra $17,100.*

2: I earn over $180,000.

       Ask your            Reduce your           Your super
                                                                        You’re in
      employer to          weekly take-           account
                                                                        front by:
    salary sacrifice:      home pay by:           picks up:

    $37 per
        week                 -$20                +$31                   55%
After 10 years an extra $31 into super each week
could be worth an extra $19,100.*

... or maybe you’ve had
a pay rise lately?
If you’ve enjoyed a pay rise lately, or have one coming up,
why not put it to good use and channel that extra money
into your super. It could really pay off and you probably
won’t even miss it. Even if you put in just 3 or 4 per cent of
your pay, you could be way in front.

I earn between $80,000 and $180,000.

       Ask your                         Reduce your                           Your super
                                                                                                                   You’re in
      employer to                       weekly take-                           account
                                                                                                                   front by:
    salary sacrifice:                   home pay by:                           picks up:

      $83 week                              -$50                              +$71                                 42%

After 10 years an extra $71 into super each week
could be worth an extra $42,900.*

I earn over $180,000.

       Ask your                         Reduce your                           Your super
                                                                                                                   You’re in
      employer to                       weekly take-                           account
                                                                                                                   front by:
    salary sacrifice:                   home pay by:                           picks up:

   $150 week                                -$80                            +$128                                  60%

After 10 years an extra $128 into super each week
could be worth an extra $77,500.*

*Important information and assumptions.
These results are based on assumptions outlined here and are general illustrations only. If your actual situation differs from the
assumptions made, the results may differ significantly and the actual results are not guaranteed in any way. The rate of investment
return used (7.0% p.a. after investment fees and taxes) is for illustration purposes and the actual return of the fund will depend on
a number of factors. The projected amounts are expressed in today’s dollars. This means the projected amounts have actually been
reduced by an assumed rate of inflation (3.75% p.a.) each year to express the balances in terms of today’s buying power. The calculations
for each projection assume the contribution amount is indexed at 3.75% p.a. and no tax on the projected benefit amount.

Now work out how much you can
boost your super by:
1: I earn between $80,000 and $180,000.

      Would I        $20     $30     $40     $50     $60     $70     $80     $90     $100
                      per     per     per     per     per     per     per     per     per
    really miss...   week?   week?   week?   week?   week?   week?   week?   week?   week?

    That means I     $33     $50     $66     $83     $99     $116 $132 $149 $165
    ask work to       per     per     per     per     per     per     per     per     per
                     week    week    week    week    week    week    week    week    week
       pay in:

  and then my        $28     $43     $56     $71     $84     $99     $112    $127 $140
 super account        per     per     per     per     per     per     per     per     per
                     week    week    week    week    week    week    week    week    week
 gets an extra:

2: I earn over $180,000.

      Would I        $20     $40     $60     $80     $100 $120 $140 $160             $180
                      per     per     per     per     per     per     per     per     per
    really miss...   week?   week?   week?   week?   week?   week?   week?   week?   week?

    That means I     $37     $75     $112 $150 $187 $224 $262 $299 $336
    ask work to       per     per     per     per     per     per     per     per     per
                     week    week    week    week    week    week    week    week    week
       pay in:

  and then my        $31     $64     $95     $128 $159 $190 $223 $254 $286
 super account        per     per     per     per     per     per     per     per     per
                     week    week    week    week    week    week    week    week    week
 gets an extra:

“You probably won’t even miss it
 next week — but when you retire
 you’ll definitely notice
 the difference!”

Do you already pay extra into super,
but not by salary sacrifice?

    If that’s the case     The tables below show the difference between paying
      then first of all,   money into super through salary sacrifice, rather than after
                           tax voluntary contributions. Depending on your income,
  congratulations on       and if your employer will let you salary sacrifice, you could
      recognising the      be able to increase your payments into super without any
 benefits of topping       cost to you. Or, you could pay in the same amount to super
up your super! But if      and end up with more cash in your pocket!

       you are paying
                                            After tax         Your          Money in
     your money into        Salary        contribution     weekly take     your super
  super after you’ve                       each week        home pay       each week
      paid income tax
      on it (voluntary      $80,000            $50            $1,122           $50
        contributions)      $180,000           $50            $2,286           $50
      then you might
   be missing out on       Now, see what a difference it makes to your super if you
       extra money in      make your contribution before it’s taxed (‘salary sacrifice’).
   your account, or in
          your pocket!                       Salary           Your          Money in
                            Salary          sacrifice      weekly take     your super
                                           each week        home pay       each week

    Same take home pay,     $80,000            $73            $1,122           $62
          more in super.    $180,000           $82            $2,286           $70

          Same in super,    $80,000            $59            $1,132           $50
    more take home pay.     $180,000           $59            $2,300           $50

                           Check out the salary sacrifice calculator on our website to
                           run your own comparisons on how much more you can put
                           into super without it costing you a cent!

Why would I want to
pay MORE money into my super?

Of course it’s up to you how much money you have going
into super, and even though it may still be a long way away,
most of us would rather have a retirement where we feel
secure and comfortable and can afford to treat ourselves
to a good lifestyle. For many people the only way they will
reach this point is to build up a nest egg in superannuation.
Our website contains a retirement modeller which allows
you to assess how you are currently placed with your super
savings and how much you might build up by the time you
retire. You can also see how much money this will give you
to live on each year. Why not use our modeller to
get an idea of your own situation.

Sure, there are other ways of saving for your
retirement, but saving through your super gives you:
• the discipline of paying regular amounts,
• a way to build your money so you won’t nibble
  away at it before you should,
• access to expert investment managers,
  and most importantly
• one of the most tax effective ways to save money.

Barring something unfortunate, your
retirement will happen one day. Will you be
prepared financially?

Frequently asked questions

When can I get my             Are there any limits                I earn less than
hands on my money? to how much I can                              $80,000. Can I
One of the great things about salary sacrifice?                   benefit from
using super as a savings           There are limits to the        salary sacrifice?
vehicle is the fact you can’t      amount of money you can        Yes, you probably can.
fritter away your money.           pay into super in a year.      If you earn under $61,920
The Government wants us            If you are going to salary     you may be eligible
to save for our retirement         sacrifice, the maximum         for the Government’s
and helps through taxing           amount your employer can       co-contribution scheme
super less than virtually all      pay in for you at a reduced    where they reward you for
other forms of investment.         tax rate is $25,000 each       saving money in super by
The trade-off is they make         year. This includes both the   topping up your account
us keep our money growing          standard 9% they must pay
                                                                  as well. This is a great
in super until we reach our        for you plus any amounts you
                                                                  opportunity and one you
preservation age. The table        ask them to salary sacrifice
                                                                  need to investigate if you
below shows preservation           for you. (Until 2012 this
                                                                  are in this income range.
ages which change between          amount is $50,000 for
                                                                  However, you need to pay
55 and 60 depending on             people aged 50 or over.)
                                                                  in after tax, or voluntary,
when you were born. Once           Provided you stay within       contributions to get the
you reach your preservation        these amounts (and other       co-contribution — salary
age and retire from the            limits for other types of
                                                                  sacrifice contributions
workforce you can access           contributions), there are no
                                                                  don’t count.
your money. And what’s             limits to the amount of
really great about super           money you can accumulate in If you earn between
is that once you turn 60,          super — and take out tax free $35,000–$80,000 the
payments from your super           when you reach 60!              features of salary sacrifice
are absolutely tax free!                                           for you are the same as the
                                   Your employer may also
                                                                   examples shown in this
                                   have limits to the amount
 Date of birth      Preservation                                   booklet except your marginal
                                   they will agree to salary
                        age                                        tax rate is 31.5%, not 39.5%
                                   sacrifice for you.
 Before 1/7/60          55                                         or 46.5%.
 1/7/60 – 30/6/61       56         It is important to talk to your
 1/7/61 – 30/6/62       57         employer about how they
 1/7/62 – 30/6/63       58         will calculate your super
 1/7/63 – 30/6/64       59         contributions if they agree
 After 30/6/64          60         to let you salary sacrifice.

Returns have been low for                      Why would I choose Sunsuper?
super recently. Why would I                    Sunsuper is one of Australia’s largest and
put money in now?                              fastest growing super funds. More than one
Now is a great time to invest in super as the million Australians trust Sunsuper with their
world’s on sale! Share markets around the      super. Our fees are among the lowest you
world have seen values fall in recent times. will find, our investment performance puts
History tells us this happens regularly but    us among the best performing funds in the
it also tells us share markets eventually      country, and we can offer you free advice over
recover, and often quite spectacularly. Now the phone from qualified financial planners
could be the perfect time to invest in super in our Member Advice Centre (see Important
and get exposure to assets which could         information on page 13). We invite you to
climb strongly in value over the next few      compare us for both value and quality.
years as markets bounce back.                  But don’t just take our word for it. Year after
That said, if you have several years left to   year, we’ve been awarded the top ratings from
build up your super, or even if you’re about three of Australia’s leading independent super
to retire and still have several years to live fund ratings houses. We’ve also been judged
off your super, you’ve got time to ride out    as the 2008 AFR Smart Investor Magazine’s
the highs and lows of investment markets.      Industry Fund of the Year and Super Ratings
The most important thing is to give your       Pension Fund of the Year 2009.
money time to grow. Compounding interest       So one million Australian’s and all of those
(interest you earn on your interest) really    independent judges must think we’re doing
takes off the longer it is allowed to take     something right!
effect. So the sooner you invest money into
super, the longer it will have to grow and
the higher your savings will climb.

     Don’t delay!
     The longer you wait the more
     you could be missing out on.

What next?
It’s simple to salary sacrifice super into Sunsuper.                                       “Your employer
Just ask your employer if they will allow you to salary                                     will make all of
sacrifice superannuation contributions. There is nothing                                    the arrangements
you need to tell us, your employer will make all of the
arrangements with us for you. Once you agree on an
                                                                                            for you, once
amount with your employer, just sit back and watch the                                      you agree on
money roll in!                                                                              an amount”
If you need help deciding how much to salary sacrifice you
can use our calculators. Or, if you need some advice on
getting your super set correctly why not call our Member
Advice Centre so we can give you the help you need.

  Important information
  This publication has been prepared and issued by Sunsuper Pty Ltd (ABN 88 010 720 840) (AFSL 228975) (“Sunsuper”). While it
  has been prepared with all reasonable care, no responsibility or liability is accepted for any errors or omissions or misstatement
  however caused. All forecasts and estimates are based on certain assumptions, which may change. If those assumptions change,
  our forecasts and estimates may also change. Contributions to superannuation are subject to the preservation rules. Sunsuper is
  the trustee and issuer of the Sunsuper Superannuation Fund (ABN 98 503 137 921). A Product Disclosure Statement (“PDS”) is
  available by contacting the Customer Service Hotline on 13 11 84 or by visiting You should consider the PDS
  in deciding whether to acquire, or to continue to hold, the product. This document has been prepared for general information
  purposes only and not as specific advice to any particular person. Any advice contained in this document does not take into
  account any particular person’s objectives, financial situation or needs. Accordingly, you should consider how appropriate the
  advice is to your own particular objectives, financial situation or needs before acting on any advice.
  The Member Advice Centre provides financial advice about your Sunsuper accounts through representatives of Sunsuper Pty
  Ltd or Sunsuper Financial Services Pty Ltd (ABN 50 087 154 818, AFSL No. 227 867). More complex financial planning services
  are provided on a fee-for-service basis through Sunsuper Financial Services Pty Ltd, a wholly owned subsidiary of Sunsuper.

Sunsuper Pty Ltd                     Contacting us is easy:
ABN 88 010 720 840
AFSL No. 228975
                                     Call     13 11 84 (+61 7 3121 0700 when overseas)
Sunsuper Superannuation Fund         Web
ABN 98 503 137 921                   Mail     GPO Box 2924 Brisbane Qld 4001
                                     Fax      07 3016 7722

For 2009, Sunsuper has been recognised as one of Australia’s leading superannuation funds
by each of the separate independent organisations shown below.
                                                                                            1022 (07/09)

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