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TL;DR

New rules for the 1718 financial year allow more flexibility for employees to make lump sum contributions to superannuation.

Transcript

today ever welcome to this week's video my name's robert goudie and this week would have a look at some of the new rules that are coming in for the 1718 financial year for those that are employed so in the past a self-employed person could look at their taxable scenario look at their income for the year and decided to put a lump sum into superannua... Read More

Key Insights

• 🤳 Self-employed individuals could make lump sum contributions to superannuation in previous years to lower their income tax.
• 🍹 Employees who received 10% or more of their income from another job had to salary sacrifice rather than make lump sum contributions.
• 🍹 Starting from the 1718 financial year, all employees can make lump sum contributions, providing increased flexibility in managing their superannuation.

Questions & Answers

Q: What rule allowed self-employed individuals to make lump sum contributions before the end of the financial year?

The self-employed were able to assess their taxable income and determine if making a lump sum contribution to superannuation would help lower their income tax.

Q: How did the 10% rule affect employees who received income from another job?

The 10% rule prevented these employees from making lump sum contributions at the end of the year. Instead, they had to salary sacrifice throughout the year.

Q: What has changed for employees in the 1718 financial year?

The 10% rule has been abolished, allowing employees to make lump sum contributions to superannuation, providing more flexibility in managing their contributions.

Q: Should employees continue salary sacrificing or change to lump sum contributions?

It is recommended to continue with salary sacrificing as it acts as forced savings and may be more challenging to find a lump sum at the end of the year.

Summary & Key Takeaways

• In the past, self-employed individuals could make lump sum contributions to superannuation at the end of the financial year to lower their income tax.

• Previously, employees who received 10% or more of their income from another job could not make lump sum contributions and had to salary sacrifice instead.

• Starting from the 1718 financial year, this restriction has been abolished, allowing all employees to make lump sum contributions to superannuation.