Hello Members,
I have a question regarding Super contribution made by the employer every month. While we are across admin fee & other insurance deductions being done on the super contribution, it was a little surprising to see 15% contribution tax deduction on every amount credited to super fund. This income in not a higher earner income. I am not very clear on how super funds are managed, any insight would be helpful.
Certain contributions form part of the assessable income of the super fund. This includes employer contributions. As super funds have a tax rate of 15% - those amounts will be taxed at that rate.
Super funds are required to make provision for tax payable (similar to individual taxpayers who would be under the pay as you go instalments) and make payments throughout the financial year. Different funds may have slightly different approaches but most will 'deduct' an amount as provision toward the future tax liability on those contributions. After the end of the financial year, if more tax was set aside than needed, an adjustment will be made back into your account.
Reporting and lodgment dates for APRA funds | Australian Taxation Office (ato.gov.au)
Certain contributions form part of the assessable income of the super fund. This includes employer contributions. As super funds have a tax rate of 15% - those amounts will be taxed at that rate.
Super funds are required to make provision for tax payable (similar to individual taxpayers who would be under the pay as you go instalments) and make payments throughout the financial year. Different funds may have slightly different approaches but most will 'deduct' an amount as provision toward the future tax liability on those contributions. After the end of the financial year, if more tax was set aside than needed, an adjustment will be made back into your account.
Reporting and lodgment dates for APRA funds | Australian Taxation Office (ato.gov.au)
Thank you JM_84
Employer contributions are taxed 15%.
Can we claim this tax?
No
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