'Just wondering if you can tell me - I hear we are taxed 15% twice in our Super - is that once at 15% with our Employers contributions for the year and then second, for any profits of that year? Is that right? Do we get slugged a third time to take the Super out? Sorry if this is basic - I'm just not sure. Regards.'
Is the glass half empty?
Lets take a top rate taxpayer. If the earn an extra $100 it is taxed at about 50%, and then the remaining 50% that is invested will be taxed at almost 50%.
By putting the funds into super , the funds pay 15% (rather than the above ~50%), and the earnings are taxed at 15% (rather than the ~50%). Now compound this advanatge over 5,10,20,30 years and it really is very significant
The glass is now half full!
When you take the super out it is tax free, assuming you are over 60. Some jurisdiction allow full tax relief on the funds going in, but tax all the returns in pension phase at full marginal rates.
For anyone who is happy to tie up the funds until age 60, it really s a gift from the taxpayers of Aus.
PS if you really want to game the system, work in the US and get full tax relief on your contributions, and then return to Aus. The bi lateral tax treaty means zero tax in either jurisdiction. And that is a gift from the taxpayers of the US
