Your 2019 End of Financial Year Super Reminders!
With the end of another financial year around the corner, it’s important to note timely tips to help you meet your end of financial year business requirements, as well as prepare yourself for the financial year ahead. Here’s what to consider as the end of financial year approaches.
Payment of super and claiming a tax deduction
If you’re considering making employer super payments (including Superannuation Guarantee) and claiming a tax deduction this financial year 2018/19, the super payments must be paid and received by your super fund by Friday, 28 June 2019 as 30 June 2019 falls on a Saturday. It is generally overlooked that payments must also be received by the super fund by 28 June 2019 to claim a business tax deduction this financial year. This also includes self-employed contractors contributing super payments on their own behalf and looking to claim a tax-deduction.
We recommend you make superannuation payments by 20 June 2019 to give time for your super fund to receive and process them into your account prior to 28 June 2019.
Superannuation Guarantee payment amount
The Superannuation Guarantee (SG) minimum payment amount for employers on behalf of eligible employees for the 2018/19 financial year is maintained at 9.5%. This is scheduled to remain at 9.5% until 1 July 2021.
While the SG minimum amount remains frozen until 2021, the updated ATO superannuation thresholds show the maximum contributions earnings base for eligible employees will rise to $55,270 per quarter ($221,080 annualised, but measured quarterly) from 1 July 2019. This is an increase from $54,030 per quarter ($216,120 annualised, but measured quarterly) for the current 2018/19 financial year.
Don’t forget the super contributions cap
While the superannuation contributions cap affects employees based on individual circumstances, it’s wise to be aware from an employer’s perspective what contributions cap applies to employer super contributions especially when salary sacrifice contributions are involved. This will help your employees keep an eye on their contributions cap to avoid paying any additional penalty tax on contributions that exceed the cap.
The concessional contribution cap (SG, salary sacrifice, and employer additional contributions) for the 2018/19 has remained at $25,000 per financial year, regardless of your age. This is of particular importance for employees who are salary sacrificing contributions into super.
Consider making personal (after-tax) contributions to super by 30 June 2019 and claim a tax-deduction, if eligible
You can make after-tax (or non-concessional) contributions to super, which could come from regular after-tax payroll deductions, your personal savings, an inheritance or from the sale of investments. For the 2018/19 financial year, the maximum after-tax (non-concessional) contribution is $100,000 per financial year (or 3-year bring-forward rule of up to $300,000). This allows you to make substantial contributions to super and build up your retirement savings, and is now subject to not being over a $1.6m account balance limit.
As with pre-tax (concessional) contributions, it’s important to maximise your contribution by 30 June 2019. From 1 July 2017 and again for the 2018/19 financial year, the tax-deductibility of after-tax contributions has been extended to all eligible individuals, regardless of your employment. Any after-tax contributions claimed as a tax-deduction will attract a 15% contribution tax and count towards to the $25,000 concessional contribution cap.
To find out more about how NESS Super can help you and your business with any of the topics outlined in this article and also arrange your FREE workplace or worksite meetings to help you and your employees get the most out of their super, please contact Mynas Leontios, NESS Super’s employer service representative on 0448 432 443 or by email at email@example.com At NESS Super, we are here to help.
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The information contained in this article is up-to-date at the time of its publication. However, some information can change over time. The contents are for general information only and do not constitute personal advice. We recommend that you consult with a suitably qualified person before making any financial decisions.