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How is tax calculated with voluntary super contribution?

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Newbie

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Replies 1

Hi,

 

Been reading but still confused about voluntary super contribution. Not sure how it works and how to operate it.

 

Let's say the amount is over the tax threshhold and taxed at 32%

Before tax $10000

After tax $6800

Taxed $3200

 

If I make a $10000 voluntary contribution to any super account from the after tax money, would ATO refund the 17% difference at the next tax lodgement? That is a refund of $1700 from $3200

 

 

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Most helpful response

Devotee

Replies 0

I'm not really following your question... but I'll give this a go.

 

Assuming you mean you earn enough that you are in the 32% tax bracket...

- You will get a tax deduction in your personal name for $10k

- You will save $3.2k in personal tax

- Your super fund will pay $1.5k in tax on that contribution

 

$10k is a nice round figure and coincidentally matches the COVID-19 early release amount. If you have accessed that and plan on re-contributing it to get a tax advantage - that would be against the rules and expect the ATO to come down on you heavily

1 REPLY 1
Highlighted

Most helpful response

Devotee

Replies 0

I'm not really following your question... but I'll give this a go.

 

Assuming you mean you earn enough that you are in the 32% tax bracket...

- You will get a tax deduction in your personal name for $10k

- You will save $3.2k in personal tax

- Your super fund will pay $1.5k in tax on that contribution

 

$10k is a nice round figure and coincidentally matches the COVID-19 early release amount. If you have accessed that and plan on re-contributing it to get a tax advantage - that would be against the rules and expect the ATO to come down on you heavily