There are a few factors to consider:
1) if you earn under $37k there is the Low Income Super Tax Offset (LISTO) that can result in up to $500 of your concessional contributions tax (the 15%) being refunded into your super. That applies whether it's your concessional contribution (the ones you either salary sacrifice or pay out of after tax income and claim a tax deduction for) or the contributions your employer makes. It basically means the contributions tax is $0 for the first $3,333 of concessional contributions a year (including employer contributions).
https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/government-super-contributions/low-income-super-tax-offset
2) if you make non-concessional contribution of $1,000 (ie make an after tax contributions but you don't claim a tax deduction for them), the government co-contribution can apply to give you an extra $500 in your super. You can't withdraw that under the FHSS but can withdraw the $1k and associated earnings - so while the bonus $500 won't help your house deposit, it's there compounding for the next 40 years or so. It seems small, but if you do it each year it can add up.
https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/government-super-contributions/super-co-contribution
3) the earnings on your super contributions will be taxed at 15% in your super fund - but even though your
average tax rate is only 7% now - your incremental tax on the investment earnings is being taxed at 15% already - because your first 18,200 is tax free but the comparison between super and outside super means the relevant tax rate on the interest is the rate on the "extra" income above your salary - which is in the 15% bracket already.
4) another way to look at it though, is that if you hang onto all the money outside super (or perhaps all except the $1,000 non-concessional each year to get the government co-contribution each year, as that's a 50% return on investment immediately), then when you graduate and are on a high tax rate, you can pop it into super and claim a tax deduction at a higher rate of tax that year (max $15k per year of contributions can qualify for FHSS withdrawl though). So that might be a better bang for your buck, depending what you will be earning and when that is relative to you buying a house.
So with that information, you can crunch the numbers.
71 views
1 replies