Making contributions

Contributions to your super account are the building blocks of your retirement savings. Compulsory employer contributions are the foundation blocks, providing you with a degree of security in retirement. To build your super so that you can live the lifestyle you want in retirement, you should consider the different contribution options available to you.

Generally, contributions fall into three categories:

Concessional contributions are contributions made with pre-tax income. They are called concessional contributions because income directed to superannuation is taxed at a concessional rate – generally a lower rate than other income.
Concessional contributions are usually made by employers, on an employee’s behalf. They include:

• Employer contributions
• Salary sacrifice
• Self-employed contributions

There is a limit on the amount of concessional contributions you can make each year, see Tax on Contributions.

Non-concessional contributions generally come from your after-tax income. They include:

• Voluntary contributions
• Spouse contributions

There is a limit on the amount of concessional contributions you can make each year, see Tax on Contributions.

Other contributions that may form an important part of your overall strategy are:

• Co-contributions
• Rollovers
• Super-splitting

From 1 July 2009, non-wage remuneration will be included in income tests used to determine eligibility for a range of government financial assistance programs. Certain salary sacrifice superannuation contributions will be included as income for income testing purposes, as well as the self-employed 10% income test and the spouse contribution rebate income test. This change to income could affect your eligibility to receive the Federal Government Co-contribution and spouse rebate. If you are eligible for a co-contribution, it will continue to be automatically calculated by the Australian Taxation Office and deposited into your super fund each year after you lodge your tax return.

Getting your contribution strategy right can help you live the life you desire, when you retire. As a member of Media Super, you can access some free limited financial advice from Industry Fund Financial Planning.

To find out more, visit Extra member benefits.