Are you aware of the benefits available to you from superannuation?
Let’s focus on only one today – the concessional tax rate available only to superannuation funds.
Super funds pay tax on contributions into the fund at the rate of 15% (or up to 30% for those earning $250,000+ per year).
Super funds then pay 0-15% on the income and capital gains within the fund.
Let’s contrast that with other taxpayers:
- Individuals pay tax on a sliding scale, where you pay*:
- 0% up to $18,200
- 19% on $18,201- $37,000
- 32.5% on $37,001 – $80,000
- 37% on $80,001 – $180,000
- 45% on $180,000+
*plus the Medicare levy
- Companies pay tax at either 27.5% or 30%, depending whether they are a small business or not.
For Doctors and their families, this means that except for the lowest income earners, it is better (from an investment point of view) to have funds earning income in the superannuation environment rather than having it in their own names, or a company name, as the substantial tax savings means your investment savings grow at a much faster rate.
It is just one of the reasons why we often suggest that Doctors and their families bring funds into the superannuation environment.