Just wanting to work out my concessional contributions for the financial year ending 30 June 2019.
I do not want to exceed the $25k Cap.
Do I calculate my Salary Sacrifice and Employer Contributions from 1 July 2018 to 30 June 2019, or by the actual amounts that were deposited into my Account. I know there is a timing difference as it is generally deposited by the 21st day of the month after its been earned/sacrificed.
Many thanks in advance.
It is based on when the funds are actually received by the super fund.
Lets say your employer pays you SG via super stream on the 30th June 2018 so that is counted for their purposes and probably your salary for the 2017/18 financial year. But if that money is received in the super fund on 1 July 2018, that will count towards your 2018/19 contribution cap.
So get the details direct from your superannuation fund on how much has been received this financial year, then work closely with your payroll on when exactly they will pay super contributions.
Being contributed in the month after it's earned is common, but some employers bring forward June's superannuation and actually pay it in June so it does fall in the same financial year. If not, and they won't budge, then remember May's will be your last month and alter your may salary sacrifice to whats required.
What matters is the day the contribution hits your super fund, that’s when it counts towards the caps. Not when you earn the money.
It get’s tricky & can be very easy to go over the caps if there’s a lag. As Glenn suggested, get the information direct from your super fund & don’t rely on your payslips.
late response here, but the general statement that the determining factor is the date that the fund actually RECEIVES the cash is probably true.......but the technically correct answer is that the thing which determines whether or not the contributions counts towards the members concessional cap is the date the contribution is allocated to a member account.
And a super fund trustee has 28 days to decide what to do with the cash once it is received:
1: accept the contribution and allocate it to a member account
2: accept the contribution but allocate it a contributions reserve
3: refuse the contribution and refund it.
If the fund goes with option 2, the member doesn't actually receive the allocation until later on, when the trustee gets around to it.
soooo lets try a practical example of what happens:
1: David receives $24500 in employer concessional contributions between 1/7/17 - 1/6/18
2: all these contributions get allocated to his member account,
3: they all count towards his contribution cap of $25k
4: david makes another concessional contribution on 15 June 18 of $25000
5: now if this is allocated to a contribution reserve until AFTER 30 June, then it DOESNT count towards his contribution cap
6: but it is still a concessional contribution, and is still deductible to the contributor.
In practice the fund will almost ALWAYS allocate the contribution to the member account on the day it is received, so it might look like I am splitting hairs here....
but this is a strategy that has been employed many times by people to achieve a specific result, in special circumstances:
if someone makes a large capital gain and wishes to maximise tax deductions in one year
if someone wishes to bump up their super balance so that they can enter into a specific plan which requires extra cash held in super
the devil here is in the detail, and this is a pretty technical area, which requires a high level of planning......and it always revolves around people with SMSF, because they need complete control over what happens at the fund level.
SO, remember to get advice BEFORE you do anything, and make sure that everyone knows what the master plan is.
And also bear in mind that you can now make a PERSONAL deductible contribution. It doesn't have to come from your employer......this is significant, because it might give you the ability to wait until mid June to decide how much you need to put into super, and if your employer cannot act quickly or precisely enough for you, then you can make the required contribution and claim the tax deduction in your own tax return.