Superannuation is a key component of retirement planning in Australia, and for business owners, it also comes with important tax implications. Whether you’re making contributions for yourself or your employees, it’s crucial to understand how super is taxed and how it can support your financial strategy.
Here’s what business owners need to know:
1. Super Contributions and Tax Treatment 📥
There are two main types of contributions:
Concessional (before-tax) contributions – These include employer Super Guarantee (SG) contributions and salary sacrifice amounts. They are generally taxed at 15% when received by the super fund, up to the annual concessional contributions cap.
Non-concessional (after-tax) contributions – Made from your personal income, these are not taxed upon entry to your super fund but are subject to annual caps. Exceeding contribution caps may attract higher tax rates.
2. Super Withdrawals and Retirement Income 📤
Once you reach your preservation age and meet a condition of release, you can begin withdrawing from your super. Withdrawals may be tax-free if you’re aged 60 or over. If you’re under 60, part of your withdrawals may be taxable depending on your components.
For business owners, drawing super income tax-free in retirement can be a valuable long-term benefit of strategic planning now.
3. Super for Employees – Your Obligations 👥
If you employ staff, you are required to pay the Super Guarantee, currently 11% of each eligible employee’s ordinary time earnings. These contributions must be made to a complying fund at least quarterly.
Late or missed contributions can result in penalties and loss of tax deductions, so it’s essential to stay compliant.
💡 Need support managing your superannuation obligations or planning your retirement strategy? We help business owners maximise super benefits while staying compliant. Let’s chat about your super strategy today.
