SUPER: HOW DO SPOUSE CONTRIBUTIONS WORK?

HOW DO SPOUSE CONTRIBUTIONS WORK?

To better understand how spouse contributions work in practice, let’s take a look at Greg’s example. We are only looking at tax in this example, not investment earnings.

• Greg has a salary of $75,000 per year (before deductions, including tax).
• Greg would like to make a contribution into his spouse’s superannuation account to help boost her super balance and to benefit from the spouse contribution tax offset.

Greg’s current situation

Gross salary income $75,000
- Income tax $17,422
Net disposable income $57,578

If Greg had a non-working spouse

If Greg contributed $3,000 after tax into his non-working spouse’s super account, he would be eligible to receive a $540 tax offset.

Here’s how it would look based on Feb 2015 tax and Medicare rates:

Gross salary income $75,000
- Income tax $17,422
+ Tax offset $540Net disposable income $58,118
- (After-tax) spouse contribution $3,000Net income after spouse contribution $55,118

If Greg’s spouse had an assessable income of $12,000

If Greg contributed $3,000 after-tax into his spouse’s super account, and she earned an assessable income of $12,000, he would be eligible to receive a $324 tax offset.

Here’s how it would look:

Gross salary income $75,000
- Income tax $17,422
+ Tax offset $324Net disposable income $57,902
- (After-tax) spouse contribution $3,000Net income after spouse contribution $54,902

Source: IndustrySuper