Do you have a superannuation fund? If the answer is yes, then you’ve probably heard of reportable superannuation contributions. These contributions are additional payments made to your superannuation fund, over and above the mandatory Super Guarantee rate. In this article, we’ll take a closer look at what reportable superannuation contributions are, how they’re divided, and the benefits of making them.
To begin with, Reportable superannuation contributions refer to any additional contributions made by an employer and an employee beyond the government-mandated minimum super guarantee rate. The additional contributions are divided into two categories:
Reportable employer superannuation contributions (RESC)
These are additional payments made by an employer to an employee’s super fund. They include salary sacrifice amounts and additional top-up amounts paid by an employer on behalf of the employee. Such contributions are generally taxed at a lower rate of 15% if your income is below a certain benchmark, after which they are added to your taxable income.
Reportable personal concessional contributions (RPCC)
These are additional payments made by an employee into their superannuation fund that are eligible for a tax deduction. You are required to disclose this amount in your tax return so that the correct amount of tax can be assessed. If the contribution exceeds the allowable cap, an administrative penalty is applied.
If you make reportable superannuation contributions, you may be eligible for various tax benefits. RESCs and RPCCs can be claimed as deductions when filing taxes, therefore reducing your taxable income. You may also be entitled to offsets or levies when making such contributions.
It’s important to note that the benefits of reportable superannuation contributions depend on your individual financial situation. You should consider consulting with a financial advisor to determine if making additional super contributions is the right decision.
In summary, reportable superannuation contributions are additional payments made to an individual’s superannuation fund that are over and above the minimum Super Guarantee rate. There are two categories of reportable superannuation contributions: Reportable employer superannuation contributions (RESC) and Reportable personal concessional contributions (RPCC). They can offer several tax benefits but should always be disclosed on your tax return. Before making any additional contributions, it’s important to seek financial advice to ensure it’s the right financial decision for you.
