Contribution tax of 15% is assumed to apply to employer contributions and salary sacrifice contributions as they are paid into the fund.
Salary sacrifice plus employer contributions are subject to contribution limit. For 2013/14 financial year the concessional contribution limit is $35,000 for individuals aged 60 and over. For all other individuals the limit is $25,000. If the total contributions exceed the limit, the contributions above the limit are taxed at an additional 30% tax rate.
Eligibility for the Government co-contribution is based on personal contributions paid after tax and your total annual income. To receive the full entitlement your total annual income needs to be less than $33,516 in the 2013/14 financial year and contribute $1,000. Income earned above this annual income reduces your entitlement and you receive no entitlement when your total annual income exceeds $48,516 pa. There are other eligibility criteria.
Total annual income is the sum of your tax assessable income plus reportable fringe benefits and reportable super contributions. In calculating your co-contribution amount we did not take into account any reportable fringe benefits.
The Low Income Super Contribution (LISC) has been based on the salary and the employer contributions plus salary sacrifice contributions. The maximum LISC is $500. To receive the LISC your adjusted taxable income needs to be less than $37,000 pa.
Where salary plus employer contributions exceeds $300,000, we have assumed an additional tax on contributions of 15% on contributions.
The income tax rates are the rates applicable for Australian residents for the 2013/14 financial year and include Medicare levy, mature age worker tax offset, low income tax offset and spouse contribution tax offset. The tax offsets usually offset your tax payable at the time you lodge your tax return.
The tax rates exclude other items such as seniors and pensioners tax offset and the surcharge for private health insurance.
To be eligible for the maximum Eligible Spouse tax offset of $540 your spouse’s assessable income needs to be less than $10,800 pa and your contribution to your spouse’s superannuation fund needs to be $3,000 or more. The tax offset for amounts above $10,800 reduces your entitlement and becomes nil when your spouse’s assessable income exceeds $13,800. To qualify your spouse needs to be under 65 years old or aged 65-69 years old and worked 40 hours in a consecutive 30 day period in that financial year.
Projection of extra super at age 65
The projection of extra super at age 65 is based on the assumptions below and is a general illustration only. If your actual situation differs from the assumptions made, the results may differ significantly. The actual results are not guaranteed in any way.
The projection of extra super at age 65 is the difference between the projected benefit at age 65 based on the recommended contributions and the projected benefit at age 65 based on the current contributions. The projection of extra super at age 65 assumes that you contribute the recommended contribution (indexed at 3.75% pa) until age 65.
The projection of extra super at age 65 is expressed in today’s dollars. This means the projection of extra super at age 65 has been adjusted by a rate of inflation to express the balances in today’s buying power. The assumed rate of inflation is 3.75% pa.
The projection of extra super at age 65 assumes; a rate of investment return of 7.0% pa after investment fees and tax, an administration fee of 0.05% of account balance, no insurance premiums and that the contribution caps are indexed at 3.75% pa.