Employer Superannuation Contributions

[crackaton]

a business operating as sole trader gets the 1500$ if they contribute 1000$ and are within the limits for that supa contribution. So if you run a small business, say Dick Grass Lawn mowing, and make only say 35K for the year, and contribute 1000 to your supa government will chip in 1500 and your income is 34k. Pretty sure but check because I am no accoutant.

 

[Duckman#72]

a business operating as sole trader gets the 1500$ if they contribute 1000$ and are within the limits for that supa contribution. So if you run a small business, say Dick Grass Lawn mowing, and make only say 35K for the year, and contribute 1000 to your supa government will chip in 1500 and your income is 34k. Pretty sure but check because I am no accoutant.

That is incorrect to my knowledge. If you are eligible to claim the super as a self employed person you are ineligible for the co-contribution regardless of income limits and whether you are operating as a sole trader. The only exception is if you had both a salary/wage job as well as your own business - there is potential for the claim inthat case.

And I agree with your earlier comments Crackaton and Prospector about the fairer sex rorting the system! And yes it does sux!

 

[crackaton]

My understanding is you can. What I am talking about is putting supa into some industry fund, not your own. Correct me if I am wrong....

 

[crackaton]

That is incorrect to my knowledge. If you are eligible to claim the super as a self employed person you are ineligible for the co-contribution regardless of income limits and whether you are operating as a sole trader. The only exception is if you had both a salary/wage job as well as your own business - there is potential for the claim inthat case.

And I agree with your earlier comments Crackaton and Prospector about the fairer sex rorting the system! And yes it does sux!

oops sorry did not read all your post. Yes what I meant was you have a part time job paying supa, and your own business. Even if the job is some sh!tkicker job but they put supa in, then you chip in 1K from your own pocket, it comes off your overall income, and you get 1.5K as bonus.

Think I got it right that time.

 

[Duckman#72]

I agree with you about employee perceptions, but I still think that compulsory contributions are not a tax because they're not government revenue and government can't spend them. The money doesn't go to government (except for unfunded public service funds, but that's another story); it goes to superannuation funds. From the government point of view, compulsory super is the same as private medical insurance.

Interesting points of view Ghotib although I have to disagree. From the governments point of view compulsory super is not the same as private medical insurance.

Compulsory superannuation is exactly that - compulsory. Taxpayers can choose whether to be in private health cover. If they choose to be in it - they pay their fees and then they will pay exactly the same medicare levy as the next person who chooses not to be in private health. There is no difference whether you are in or out of the private health system - everyone pays the same rate. However, if you are over the income limits set by the ATO and you don't have private health cover - you are hit with a Medicare Levy "Surcharge". And what is a surcharge I hear you ask? That's right - another name for TAX!! So maybe I am agreeing with you Ghotib!!!

Call it what you like but it is a tax. ha ha

 

[Prospector]

Call it what you like but it is a tax. ha ha

And while the Govt doesnt directly receive monies paid into super, they still receive 15% on any profit; the same on any CGTax, and until recently tax from the high earner's surcharge. And the only reason why the Govt has become proactive about super is because they can't afford to pay the high rate of pensions once us lot reach the retirement age.

So having said all that, actually, it IS A TAX!

 

[crackaton]

And while the Govt doesnt directly receive monies paid into super, they still receive 15% on any profit; the same on any CGTax, and until recently tax from the high earner's surcharge. And the only reason why the Govt has become proactive about super is because they can't afford to pay the high rate of pensions once us lot reach the retirement age.

So having said all that, actually, it IS A TAX!

You're right. Supa is dead money. Better places to put.

 

[Duckman#72]

You're right. Supa is dead money. Better places to put.

Super does have advantages. For investments (except for borrowing money) why would you have equities invested outside a superannuation vehicle? The system could be redesigned but don't throw the baby out with the bath water.

 

[crackaton]

Super does have advantages. For investments (except for borrowing money) why would you have equities invested outside a superannuation vehicle? The system could be redesigned but don't throw the baby out with the bath water.

Care to elaborate?

 

[crackaton]

I honestly can not see the system working much longer which is good. This country has well and truly met it's obligations and I believe it is time for everything to go quiet or reverse.

Well done to Packer and all his media BS. You've totally enthralled the mindless majority.

 

[Duckman#72]

Care to elaborate?

Well for starters - let's say you were a taxpayer on 50K per year.

Let's also say that you have $100,000 to invest and you think Westpac, RIO, Telstra and Woolies shares are a great investment opportunity over the next 5 years. It's much better to invest in the super fund. Income is taxed at 15% and capital gains at 10%.

The only disadvantage being you don't have access to the money and you cannot use as equity for borrowings.

 

[Julia]

Well for starters - let's say you were a taxpayer on 50K per year.

Let's also say that you have $100,000 to invest and you think Westpac, RIO, Telstra and Woolies shares are a great investment opportunity over the next 5 years. It's much better to invest in the super fund. Income is taxed at 15% and capital gains at 10%.

The only disadvantage being you don't have access to the money and you cannot use as equity for borrowings.

Quite. Where else can you only pay 15% tax on your investments?
However, I think for younger people it's a disadvantage to lock the funds away too soon. When one is beginning to look at retirement on the horizon it makes a lot of sense.


Julia

 

[anon]

Regardless of what classification superannuation is placed in, it is a cost to the employer which has to be recouped if he is to stay in business. Thus, since neither the Treasury nor the Tax Office will refund that money, the employer has to pass this superannuation expense on to the consumers in form of higher costs.

Great stuff if his goods/services are exported because consumers in some foreign country will pay. Most of the
stuff, however, will be consumed locally - with the super component increased by overheads etc. And the GST on top of the lot.

Since every employer has to pay super, they are all on the same footing competition wise. Not so, however, if they have to compete against imported goods, especially from Asia, where there is no such stuff as super.

The next increase in compulsory (to the employer) superannuation could result in some businesses becoming
uncompetitive and having to shut up shop, or moving their businesses off-shore. Maybe the time has come for the next increase in super rate to be a compulsory contribution by the employee and not by the employer.

anon

 

[Duckman#72]

Regardless of what classification superannuation is placed in, it is a cost to the employer which has to be recouped if he is to stay in business. Thus, since neither the Treasury nor the Tax Office will refund that money, the employer has to pass this superannuation expense on to the consumers in form of higher costs.

Thankyou for everyones contributions.

The general consenus seems clear enough - employers/small business are sick of having costs forced upon them, that are eating away at margins and do nothing to encourage employment fo more staff.

Duckman

 

[crackaton]

Thankyou for everyones contributions.

The general consenus seems clear enough - employers/small business are sick of having costs forced upon them, that are eating away at margins and do nothing to encourage employment fo more staff.

Duckman

Sad really but that's the way things are headed. Small business can not compete.

 

[robert toms]

Were not wage rises bargained away for superannuation contributions by the employer?

 

[Duckman#72]

Were not wage rises bargained away for superannuation contributions by the employer?

How long ago were you referring Robert?

 

[Goin' For Broke]

I don't know about a sole trader, as my wife and I are operating as a partnership, but I am pretty sure my accountant is no fool and would have told me about any concessions. In anycase Duckman is right I am talking about the buck fifty for free the govt gives out to employees, who I just found out today have income limits to get the full benefit.
ML is totally scary! I haven't even considered that one. As someone (was it Mumbank or something) mentioned above, I bet small business would really think twice about hiring women, just in case. That's just not right.
I had an employee who I trained up in the business who up and left to start his very own business...in direct competition with me! Who saw that comming? All's good though, turned out he made way more working for me than running his own business and I eventually bought him out, just to get rid of him. I haven't hired anyone since. Yes I have read Robert Ky-what-his-name's book. And his second, and his third. I think I'm in Quadrant 2 from memory. It's all good on paper but abit harder in practice. It was a good book though eh. A pity I read it after I bought my first negatively geared property!

 

[Odduna]

However, if you are over the income limits set by the ATO and you don't have private health cover - you are hit with a Medicare Levy "Surcharge". And what is a surcharge I hear you ask? That's right - another name for TAX!! So maybe I am agreeing with you Ghotib!!!

Hmm, i thought the medicare levy and medicare levy surcharge rates and thresholds are set by the Medicare Act 1986, administered by the Health Insurance Commission.

The ATO is just the collection agency.

Now for my general comment:

I see TAX as the cost of living in a society.
If you don't like it, you have a choice - bugger off to a different country!

(hope i can say bugger)

 

[crackaton]

Yesthat's fine, when the tax is spent wisely, unlike the recent 400k pay out to Iranian illegals.

Or all the other stuff ups that seem to be the burden of the tax payer.