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First Home Owner Super Saver Scheme - tax

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Hi there, 

 

I'm not sure if I fully understand the tax implications of the FHSS scheme. 

 

I understand this: 

  • Eligible concessional (salary-sacrificed) contributions will be taxed at 15% (i.e. 85% of funds will be available)
  • When FHSS funds are released, tax withheld will be your expected marginal tax rate, including Medicare levy, less a 30% offset

My query is centered around the point 'You must include the assessable FHSS released amount shown on your payment summary as assessable income in your tax return for the year you request the release'. 

 

Let's say I have $20,000 of FHSS funds released (contributed across three financial years), and my normal Gross Salary for that financial year is $50,000. Does that mean effectively I will be taxed as if I earned $70,000 when I lodge my tax return? 

 

Thanks, 

 

Luke 

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Hi @Luke9,

 

Thanks for your post.

 

Sorry for the delay in our response.

 

Your assessable FHSS released amount (your concessional contributions plus associated earnings) is included in your assessable income in the financial year you requested your release. 

 

It's worth keeping in mind, you pay tax on your taxable income, which may be different to your assessable income. Your taxable income is your assessable income minus your allowable deductions.

 

Let us know if you have any further questions.

 

Thanks, NicM

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Hi @Luke9,

 

Thanks for your post.

 

Sorry for the delay in our response.

 

Your assessable FHSS released amount (your concessional contributions plus associated earnings) is included in your assessable income in the financial year you requested your release. 

 

It's worth keeping in mind, you pay tax on your taxable income, which may be different to your assessable income. Your taxable income is your assessable income minus your allowable deductions.

 

Let us know if you have any further questions.

 

Thanks, NicM

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Hi @Luke9,

 

We appreciate there are a lot of questions around how the FHSS scheme works; we’re in the process of finalising some FHSS knowledge base articles for Community, so watch this space! 

 

Regarding your follow-up question, your salary sacrifice contribution is made when your super fund receives it (not when it’s deducted from your salary or wage). So your fund will report the contribution in the financial year they receive it.

 

However, your salary sacrificed amounts (which are above the compulsory super your employer pays) will be shown on your payment summary or income statement as reportable employer super contributions (RESC) in the year they relate to.

 

So using your example, the $5,000 salary sacrifice amount is deducted from your salary or wage in June 2019 (2018-19 financial year) and the contribution is paid to your super fund in July 2019 (2019-20 financial year). In this scenario, the $5,000 would be reported:

  • as RESC on your payment summary/income statement from your employer in the 2018-19 financial year, and
  • by your super fund as a contribution in the 2019-20 financial year.

 

It’s worth keeping in mind that your RESC amounts aren’t included in your assessable income in your tax return (as they’re taxed at a concessional rate in your super fund).  However, they are included in the 'Income tests' section in myTax and are used to determine your for certain eligibility offsets, benefits and concessions (e.g. Higher education loan program repayment or Medicare Levy surcharge).

 

Hope this clears up any confusion.

 

Thanks, NicM.