Tax traps for everyone and Section 293 catching those with income over $250,000PA.
Recent tax changes to the level of super contributions and the rate of tax is likely to continue to catch more people off guard.
The level of tax deductible contributions to super (which included Salary Sacrifice to Super arrangements) is now only $25,000 per year. Salary Sacrifice arrangements with your employer need to be double checked to allow for the change. Considerations are needed as to whether to pay the additional higher rate of tax if the $25,000 is exceeded or withdraw the excess contribution amount. Possibly…. this might be a conscious choice to channel more money into super….food for thought and discussion.
Those with income over $250,000 will incur an additional 15% tax on super contributions OVER and above the first 15% for super contributions. This would result in a 30% tax rate for getting money into a 15% tax earning environment. This might not be such a bad tax rate compared to other taxable rates assessed. This is of course dependent on individual circumstances and should be reviewed taking into account the other twists and turns.