At this halfway point in the year, we recommend that business owners and employees review their superannuation strategies for 2010 and consider ways to take advantage of the maximum contributions. In some cases it may be necessary to revise salary sacrifice arrangements to comply with the $25,000 deductible limit. Keep in mind that compulsory 9% contributions are also included in the cap.

Seniors and individuals

It has been common for senior employees to divert incentive bonuses into superannuation. This strategy may no longer be worthwhile given the reduced contribution limits.

For individuals earning less than $31,920, the full superannuation co-contribution is still available where un-deducted personal contributions are made to a superannuation fund. For every dollar contributed to the fund, the Government will contribute another dollar, up to a maximum of $1,000 per year. The Government’s contribution is tax free within the fund and tax free when paid out from the fund. The Government’s contribution limit reduces for incomes over $31,920 and no contribution is made for persons earning over $61,920.

Transition to Retirement

Transition to retirement (TRIS) pension remains a valid superannuation strategy to take advantage of tax concessions for superannuation contributions. Read more..