Although there are fewer fireworks and more personal admin tasks at the end of the financial year than at the calendar year, the 30th of June is still a big deal to the world of finance.
It marks, among other things, the cut-off date to make personal super contributions to your account.
We wrote this guide to help our members make personal contributions through the EOFY festivities.*
Personal contributions are voluntary contributions members make into their super fund in addition to the compulsory contributions made by their employer (currently 9.5% of someone’s salary).
People make personal contributions into their super to boost their retirement savings. Super is generally invested in stocks, property, bonds, cash and other assets in a concessionally taxed environment (super is generally taxed less than income from other sources). They may also be claimed as a personal tax deduction to reduce your total tax liability (more on this later).
Follow these 3 steps to make a personal contribution to your Future Super account:
- Log in to your online member portal.
- Fill out the Personal Contribution Form through the “Make a personal contribution” section of the portal.
- Transfer the funds from your bank to ours. Use the BPAY or direct deposit details provided in the personal contribution form. Use the payment reference number from the form when transferring the money.
Now on to tax deductions. Stick with me, I promise it’ll be worth it in the end.
Personal contributions are automatically allocated as non-concessional contributions. This means that they are not taxed when they go into an account, because they come from income that was already taxed by the government, e.g. a salary.
However, you may be able to claim personal super contributions as a personal tax deduction. This may reduce your income tax liability when lodging a tax return by the amount of the contribution claimed in that financial year.
This will mean that your personal contributions become concessional contributions and 15% tax is withheld by the super fund to be paid to the ATO. To claim, you must complete and submit a Notice of Intent to claim or vary a personal tax deduction form to firstname.lastname@example.org.
A couple of FAQs
Is there an age limit for making personal contributions?
Yes, if you are under 65 you can make a personal contribution. If you are between 65 and 74 you must pass the ‘work test’ of working more than 10 hours per week to make a personal contribution. If you are over 75 you cannot make personal contributions.**
Do I have to fill out a contribution form every time I make a payment?
Yes and No, if you choose to make your contribution regularly you must use the same amount, frequency and payment reference when transferring money. However, if you make contributions of varying amounts on varying frequencies you will need to complete a new personal contribution form each time.
Do personal contributions count towards my contributions cap?
Yes, if you claim a tax deduction for a personal super contribution, the contribution will count towards your concessional (before-tax) contributions cap of $25,000. From 1 July 2018 onwards you can bring forward your unused concessional contributions cap to the next financial year. The first year you can bring forward your unused cap is 2019-2020, but only if your balance is less than $500,000 at the end of June in the previous financial year. For more information, the ATO’s website has a useful guide.
*Please note any information provided is general in nature and should not be considered personal financial advice. We recommend you speak to a qualified financial adviser for personal advice.
**Please confirm you are eligible to make contributions to Future Super.