As you prepare your financial accounts, thinking about your Grow My Money superannuation cashback contributions is important.
For your super fund, there are two types of contributions you should consider:
a. Concessional – This is a pre-tax contribution, including the Super Guarantee (currently 10.50%) that your employer pays into your super and any salary sacrifice amounts. Concessional contributions are taxed at 15% in your super fund.
b. Non-concessional – These are after-tax contributions that you deposit directly into your super.
There are limits to the amount of money you can contribute each year, with concessional contributions generally capped at $27,500 and non-concessional contributions at $110,000.
What kind is Grow My Money?
How you classify your Grow My Money superannuation cashback contributions depends on your personal income and tax circumstances. Here are three other factors to consider:
1. The Government co-contribution
What is the Government co-contribution? If you earn less than $57,016 (the upper limit for the 2022/23 financial year) and make an after-tax contribution to your super account, then the Government may also make a contribution.
- If you earn less than $42,016 (the lower limit for the 2022/23 financial year), then for every dollar you pay in the Government could add 50 cents, up to a maximum of $500.
- If you earn over $57,016: You are not eligible for the co-contribution.
- Depending on your eligibility and total income, you may qualify for the full Government co-contribution of $500 by contributing $1,000 into your superannuation account by no later than 30 June 2023.
Learn more: Read here about eligibility for the Government co-contribution.
What does this mean for me? Suppose you qualify for the full co-contribution amount and classify your Grow My Money superannuation cashback as non-concessional contributions. In that case, for every $1 of Grow My Money earned, the Government will add up to $0.50 extra to your super, to a maximum of $500.
What do I have to do? Just lodge your tax return and ensure your super fund has your Tax File Number, and the Government will take care of the rest.
2. Low-income super tax offset
What is super tax offset? If your adjusted taxable income is less than $37,000, you may be eligible for a low-income superannuation tax offset (LISTO) of up to $500 a year.
Learn more: Read here about eligibility for LISTO.
What does this mean for me? If you are eligible for LISTO and made a concessional contribution into superannuation, which was taxed at 15%, you'll get that 15% tax back from the Government, up to a cap of $500.
What do I have to do? Just lodge your tax return and ensure your super fund has your Tax File Number, and the Government will take care of the rest.
3. Claiming a tax deduction
What is a tax deduction? You may be able to claim a tax deduction for personal super contributions made from your after-tax income, such as your Grow My Money superannuation cashback.
Learn More: Read here about claiming a tax deduction for personal contributions.
What does this mean for me? Regardless of your employment arrangement, you may be able to claim a deduction for personal contributions you have paid into your super fund.
What do I have to do? If you want to claim a tax deduction for your personal contributions, check your eligibility and then contact your super fund. You must complete a valid Notice of Intent (NOI) form to claim a tax deduction for your contribution. You need to complete and send this form to your super fund the earlier of either:
- The date you lodge your tax return for the year in which you made the contribution.
- The end of the financial year after your contributions were made: i.e. for contributions made in FYE2023 by 30 June 2024.
We hope you found the above information helpful. Whether you take advantage of any or all of the above options is a personal decision, and Grow My Money suggests you speak with your accountant for help.
This information is sourced from the ATO, and we accept no liability for that information.