What you can do before 30 June

The weather may not be acting like it, but winter is coming – and that means so is the end of the financial year.

Before June 30 hits, employers have the opportunity to help workers settle on pay agreements that work best for them, their superannuation and their future.

The end of the financial year is the last chance for employees to organise salary sacrifice agreements, whether it be through leasing a car, paying school fees or making a voluntary contribution to their super.

For those of us earning over $37,000 per year, salary sacrificing can be an easy way to grow your super – it just requires a bit of setting up. And although there is a limit to how much you can voluntarily contribute via salary sacrifice (usually $30,000), the money you do put in is taxed at a lower rate of 15 per cent.

Setting up a salary sacrifice agreement can be daunting for employees, and employers can help by offering to include it in the terms of their employment.

It’s important employees consider how much they are willing to give up in the short term to boost their long-term savings; speaking to a personal accountant or financial advisor will help.

Another option for employees and employers alike is after-tax contributions to super. Unlike salary sacrificing, after-tax contributions aren’t taxed because you’ve already paid tax on the money in that financial year.

For this reason, it’s good to inform your employees that they have until June 30 to make any after-tax contributions. There are also limits on how much you can contribute to your super in this way – check the ATO website for more information.

Those earning less than $50,454 per annum should also be made aware of the potentially benefits of contributing to super – namely the Government Co-contributions Scheme they may be eligible for.

Australians earning less than $35,454 per annum could be eligible for a maximum $500 contribution from the Government, or in other words, free money. To qualify, they’ll simply need to lodge a tax return for the year and the ATO will work out how much they qualify for. It’s a great way for lower-earners to maximise their future savings, without having to work any harder.

To really help your employees improve their super, direct them to the Super Contributions Optimiser tool on the Money Smart website – and make sure they do it before June 30.

First Super commissioned The New Daily to research and write this article. The views expressed are of The New Daily.

This publication was issued by First Super Pty Ltd (ABN 42 053 498 472, AFSL 223988), as Trustee of the First Super superannuation fund (ABN 56 286 625 181). It does not consider your personal circumstances and may not be relied on as financial advice. Content was accurate at the date of issue, but may subsequently change.