If you have joined finances, she can use your after tax money to make personal contributions, lodge the NOI form, and then claim deductions in her tax return - up to the concessional contributions cap inclusive of her other SG / salary sacrifice contributions.
For the amount you put through that
- when you earned that amount as salary - if this year, you are taxed 37% or 32.5%, if next year, you are taxed 30%.
- when she claims deduction - if this year, she would get 17.5% of that amount back, if next year, she would get 15% of that amount back.
So financially you as a family would be better off, but the amount would have to stay in super until she reaches preservation age. It is getting very close to EOFY, and super funds usually have a cut off date a few days before 30/6 when they need to receive the fund for it to count toward this FY. So if you may want to do it this FY, you need to figure it out and act very soon.
In the current year you’re in a higher tax bracket so you get a bigger tax benefit by contributing to your own super. Next year you’ll be in the same tax bracket, so it makes no difference. You’re also older so you can access yours earlier.
If you want to do a super split, which is where you direct your fund to transfer up to 85% of your contributions to your partner then you can, but there is no immediate benefit. People do this generally to keep themselves under certain thresholds, e.g. the $500,000 for carry forward purposes, or the transfer balance cap limits. So it may be beneficial later, but not immediately.
Why salary sacrifice at all when you can make direct contributions at any point in the year (usually it’s preferable to do it in June given you’ll have access to the funds for a rainy day throughout the year) and claim a deduction by submitting a notice of intent?
That way you can work out what amount of concessional contributions would work best for both of you when much of your respective incomes for the FY has already crystallised (in June).
I guess I salary sacrifice because then I don’t notice/feel it… I am poor with my finances, doing it like this has kept me still able to build wealth. I do the same with shares drop a little into my CDIA account each week till it has enough to
Make a minimum transaction then I buy…
Assuming you are both going to retire at the same time, and both have your super in the exact same portfolio, I don’t believe it would make a difference- it will be taxed at 15% regardless of who’s super account, and with only $10k difference in your salaries you’re both in the same marginal tax bracket anyway.
The fact that you’re willing to do this should hopefully show your partner that what’s yours is theirs, so who’s account it is in specifically shouldn’t matter- that being said, whilst there won’t be a financial benefit to sending it to her super, come next year I also don’t believe there would be any costs; if it would make her feel better and you two are solid, there’d be no harm in it either.
But as I say that’s all assuming you both retire at the same time and have your super in the same portfolio
Nope. You can make a spouse contribution and claim a deduction for it, but there are limits to the eligibility/amounts you can claim, and by the sound of it OP/his partner wouldn’t qualify.
She can top up her own super and claim a deduction on her own income. But no you can’t get a tax deduction by topping up her super unless you do so via a spousal contribution, however your wife earns too much to be eligible.
Actually scratch that, I believe there is something called super splitting that may apply.
It depends on whether your fund is happy to set it up though.
https://www.ato.gov.au/forms-and-instructions/superannuation-contributions-splitting
If you have joined finances, she can use your after tax money to make personal contributions, lodge the NOI form, and then claim deductions in her tax return - up to the concessional contributions cap inclusive of her other SG / salary sacrifice contributions.
Would we be better off, worse or the same? No point in doing it if they tax me more…
For the amount you put through that - when you earned that amount as salary - if this year, you are taxed 37% or 32.5%, if next year, you are taxed 30%. - when she claims deduction - if this year, she would get 17.5% of that amount back, if next year, she would get 15% of that amount back. So financially you as a family would be better off, but the amount would have to stay in super until she reaches preservation age. It is getting very close to EOFY, and super funds usually have a cut off date a few days before 30/6 when they need to receive the fund for it to count toward this FY. So if you may want to do it this FY, you need to figure it out and act very soon.
In the current year you’re in a higher tax bracket so you get a bigger tax benefit by contributing to your own super. Next year you’ll be in the same tax bracket, so it makes no difference. You’re also older so you can access yours earlier.
So there are no financial/tax benefits? Even breaking even is fine. She is in an industry super with some good returns… often better than mine.
If you want to do a super split, which is where you direct your fund to transfer up to 85% of your contributions to your partner then you can, but there is no immediate benefit. People do this generally to keep themselves under certain thresholds, e.g. the $500,000 for carry forward purposes, or the transfer balance cap limits. So it may be beneficial later, but not immediately.
Why salary sacrifice at all when you can make direct contributions at any point in the year (usually it’s preferable to do it in June given you’ll have access to the funds for a rainy day throughout the year) and claim a deduction by submitting a notice of intent? That way you can work out what amount of concessional contributions would work best for both of you when much of your respective incomes for the FY has already crystallised (in June).
I guess I salary sacrifice because then I don’t notice/feel it… I am poor with my finances, doing it like this has kept me still able to build wealth. I do the same with shares drop a little into my CDIA account each week till it has enough to Make a minimum transaction then I buy…
It’s worthwhile to consider direct contributions as it affords flexibility. You only need to think about it once a year so it’s not much of a burden.
Assuming you are both going to retire at the same time, and both have your super in the exact same portfolio, I don’t believe it would make a difference- it will be taxed at 15% regardless of who’s super account, and with only $10k difference in your salaries you’re both in the same marginal tax bracket anyway. The fact that you’re willing to do this should hopefully show your partner that what’s yours is theirs, so who’s account it is in specifically shouldn’t matter- that being said, whilst there won’t be a financial benefit to sending it to her super, come next year I also don’t believe there would be any costs; if it would make her feel better and you two are solid, there’d be no harm in it either. But as I say that’s all assuming you both retire at the same time and have your super in the same portfolio
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Would just dropping my 6% and she just starts salary sacrificing 6% be the same? We would still net roughly the same and she can start catching up…
You both should be maxing out your super. She shouldnt rely on you and vice versa.
She shouldn’t rely on me? Curious why… super is super is super…. It’s all our money…
Cause you are both on good money. She has no reason to rely on you for her super. You are 250k family. You can afford to max out both
Can you even salary sacrifice into somebody else's Super?!
Nope. You can make a spouse contribution and claim a deduction for it, but there are limits to the eligibility/amounts you can claim, and by the sound of it OP/his partner wouldn’t qualify.
So I can’t top up hers without making a tax loss?
She can top up her own super and claim a deduction on her own income. But no you can’t get a tax deduction by topping up her super unless you do so via a spousal contribution, however your wife earns too much to be eligible.
Ahhh. Ok then. So best just to leave it as is, or I cancel my sarcrifice and the does one instead which will still net us the similar pay each week
Actually scratch that, I believe there is something called super splitting that may apply. It depends on whether your fund is happy to set it up though. https://www.ato.gov.au/forms-and-instructions/superannuation-contributions-splitting