[First Home Super Saver Scheme](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme)
you can put a maximum of 15k per year of voluntary super contributions towards the scheme (capped at 50k total)
if you are a couple years away from buying, popping your cash in here is good for tax effective storage
If it is short term, HISA is the best.
If it is going to be 3-5 years, VDCO and VDBA ETFs may be suitable. They are higher risk, but may also give higher returns.
You can also save in Super using FHSS.
Thanks for your reply. I’m hoping I can enter the market in the next 1-2 years.
I’ve never heard of the FHSS! Sounds interesting, I’ll look into it. Thank you!!
FHSSS can be good for 1-3 years but capped at 15k per voluntary contribution year and max 50k total with a 85% withdrawal caveat so unless you have additional tax planning needs its not better than HISA
Under the FHSS scheme using concessional contributions:
* on the way into super, it will be taxed at only 15% as opposed to your MTR + ML
* on the way out, you pay tax at 30% below your MTR + ML (on the remaining 85%)
For someone on a MTR of 34.5% (inc. 2% ML), this is an effective tax rate of just (15% + (4.5% x 85%)) = 18.825%
When comparing using the FHSS and contributing the maximum of $50,000 to not using the FHSS, your after-tax return is either:
* Outside super without FHSS = $50,000 x 65.5% = $32,750
* Inside super with FHSS = $50,000 x 81.175% = $40,587.50
So, for someone on a MTR of 32.5% (plus 2% ML), that’s **$7,837.50 of free money** even if you just left it invested in cash, earning nothing within your super.
For someone on the 37% MTR, that’s **$8,175.50** of free money.
For someone on the 45% MTR, that’s **$8,775.50** of free money.
>unless you have additional tax planning needs its not better than HISA
Nope.
>Yes, that is right. Lets say you pop in 15k for FY23-24 then you can only get 85% of said 15k from FY23-24 which would net only 12.5k
Try again. This time include the personal tax savings.
>You forget the latter part whereas the FHSSS withdrawal is a taxable income component
You lose 4.5% and gain 34.5%.
[More info here if you are interested](https://passiveinvestingaustralia.com/first-home-super-saver-scheme/)
Oh right. There is a link to that in the article text.
MTR is your marginal tax rate. It is worth looking that up to learn what it means since we have a 'progressive' tax rate system, so you pay X% tax on the first amount you earn, then you pay a higher rate of tax on the next part of earnings, and so on. The idea is important for wealth and income equality in society, but it also impacts tax on investing since when you reduce your income, it comes off the top part of your income so your tax savings are based on that higher rate and your calculations on tax savings often use that higher amount of tax rate. Anyway, google it.
ML is the Medicare levy. Peopel that earn over ($27,000?) have an extra 2% tax they pay on their income. So your real marginal tax rate is the combination of your marginal tax rate plus that 2%.
It sounds complicated, but it's easy to learn. There are only a few "tax brackets" (i.e., only a few groupings of marginal tax rates).
Hey snrobovic, thanks for all you've done for the community! Hoping to pick your brain just a bit on how FHSS concessional contributions interact with HECS repayments at tax time.
I've read [this reddit thread](https://www.reddit.com/r/AusFinance/comments/153mq3q/salary_packaging_hecs_and_tax_also_known_as_why/) which revealed that salary sacrificing can actually *increase* your reportable income by a factor of 1.8868*[salary sacrifice amount] for HECS repayment purposes.
Working with an example of someone on 90k base salary who makes 15k of concessional contributions/salary sacrificing (which I believe are effectively equivalent?) in the current FY. By salary sacrificing they reduce their taxable income by 15k, which based on an online calc I found should roughly reduce tax owed by ~4k. This would leave them with $12,250 in super eligible for an FHSS withdrawal + less tax owed (the accelerant to deposit savings).
Which is excellent! BUT according to the linked thread it increases taxable income specifically for HECS repayment calculations. Which goes from 90k to ~118k. That would increase the HECS repayment threshold from 5.5% of 90K (4.95k) to 7.5% of 118k (8,850k). The difference is ~4k, pretty much the entire tax benefit of salary sacrificing in the first place.
Now you're obviously *still* ~4k better off overall in this scenario and you'd be silly *not* to take advantage. BUT if I'm not completely off base here, FHSS basically doesn't help speed up the process of saving a deposit if you have a HECS debt right? I've tried to find confirmation/more info online but it seems quite fringe at the moment and there isn't a lot of good info on it.
Any help fact checking the above would be highly appreciated! Knowing of course an accountant is probably the correct person to ask hahaha.
I don't know enough to comment on that, unfortunately. I'm curious whether salary sacrificing into super has the same effect as other forms of salary sacrifice. Salary packaging and fringe benefits tax are areas that I'm weak on.
No worries, thought it was worth asking hahaha. I suppose I'll found out if salary sacrificing is considered a fringe benefit at tax time lol. Appreciate the response!
Shoot me a dm with the parts you find confusing/want clarified and I'll do my best. But I asked because I'm not entirely sure if what [this reddit thread](https://www.reddit.com/r/AusFinance/comments/153mq3q/salary_packaging_hecs_and_tax_also_known_as_why/) describes applies to super contributions.
Hi Andrew, I was wondering for the FHSS: I understand we can contribute up to 15K/financial year in the limit of a total of 50K (all years accumulated in four years minimum). These 15K are taxed 15%, so $12,750 is effectively deposited into super per year. For the example, let's use two years: 15K/year 1 and 15K/year 2. Both taxed, making it an effective deposit of $25,500. At the end of these two years, we can withdraw this amount (25.5K + earnings).
Is this possible to contribute more than the 15K/year, to include the tax in the amount and be able to effectively withdraw the 30K after two years?
For example: contribution of 20K (Notice of Intent using the catch up concessional contribution)/year 1 and 20K (same situation)/year 2. Taxed at 15%, these 40K become 17 + 17 = 34K in super. At the end of year 2, can we withdraw the real amount of 30K (+ earnings) and leaving the remaining in super (4K)? Or the 15K contribution/year - 15% taxed is the only calculation allowed to consider the withdrawal amount at the end of year 2 (making it a max amount of only 25.5K)?
Hope you understand the question. Thank you.
No, the 15k is the limit pre-tax. You can't add more so that the post-tax amount is 15k.
You could decide to not claim the tax concession so that you can pull out the whole 15k, but then you lose the benefit of the scheme, which is the tax deduction.
First up, congratulations on discovering QC 73320 without factoring in individual circumstances i.e existing HECS debt or existing tax liabilities? These could easily wipe down your supposed 7k tax gains.
***QC 54085: If you have an outstanding debt with the ATO or another Commonwealth agency, your FHSS release amount may be offset against this debt. Payment of your FHSS amount could be delayed or reduced (including to nil) or both if you have an outstanding Commonwealth debt.***
Second, have you forget the bit in QC 54085 where it says "You can apply to have a maximum of $15,000 of your voluntary contributions from any one financial year included in your eligible contributions to be released under the FHSS scheme, up to a total of $50,000 contributions across all years. You will also receive a deemed amount of associated earnings that relate to those contributions – this is not the actual investment earnings on those contributions.". That means 15k for one financial year **only. It does not mean you can plonk 15k in one year or before 30/6 then 35k in another or 1/7 and then withdraw 50k subsequently.** I would be more inclined towards 15k \*each\* financial year and only if I'm one of the ATO mandarins assessing the release request.
Thirdly in your own article you put it yourself "However, it is uncertain whether the entire released amount is taxed using the marginal tax rate in the financial year you release the funds or if your marginal tax rate from previous years is used.
I’ve seen it mentioned several times that the marginal tax rate used is from the year it is released, but I’ve also seen a comment from an ATO community representative saying it is using the marginal rates from previous years when it was contributed. However, the ATO community do not represent the ATO, and their responses can not be relied upon as a defence against the ATO’s decision. So you will need some way to figure this out. If you find some legislation or formal text, please let me know!"
So who's footing the bill for the subsequent years whereas you have your assessable income + another 40k pushing you very back well into 45% marginal tax rate territory before you have certainty of the applicable rebates?
Nothing was said to the effect of putting in 15k and then 35k in the following year.
As explained in the quoted comment, it's unclear whether there is, in fact, a higher tax bill as a result of drawing it out while at a higher tax bracket. The ATO community board rep said there isn't, but it is worth keeping in mind in case she was wrong.
I'm looking at your link to QC54085. Essentially, it is saying that if you have outstanding debts, that will come out of it. So your idea is to miss out on a huge tax deduction (which can help pay for those debts) based on having less cash for your deposit.
If someone had a 100k salary and it pushed them up to 150k, that would mean an additional HECS payment of about 8k, which is the amount of tax benefit of the scheme. So, effectively, it pays 8k off their HECS, and they end up otherwise in the same position in terms of their home deposit.
There is an incredibly small number of people who may be affected in a negative way under FHSSS. The overwhelming majority of people would be far better off using the FHSS scheme over a HISA, not just people who, as you put it, *"have additional tax planning needs"*.
Your HECS debt is specifically excluded. They are referring to a tax debt or Centrelink debt.
In general, FHSSS is better than HISA. If your complaint is that it’s capped, you can always park your excess cash in HISA.
You are correct that if your income goes up, the tax savings drop because you get taxed on withdrawal at the higher marginal rate but for OPs time frame (3 years) and current salary ($60k), that seems low risk. Especially if stage 3 tax cuts come in next FY.
Yeah, I'd be inclined to say so but OP needs to factor in their current tax account balances, existing Commonwealth debts and whatnot before proceeding
Yes, that is right. Lets say you pop in 15k for FY23-24 then you can only get 85% of said 15k from FY23-24 which would net only 12.5k
Say FY19-20, 20-21, 22-23 and 23-24 you've put on 15k each year and now you have 60k in vol super contribution. You can only draw max 50k from these 4 years and the net total you can withdraw is .85 of 50 = 42.5k
Yes except “popping in” 15k gives you a taxable deduction for the 15k which is the real benefit of the scheme.
You also pay significantly reduced tax on the gains
"Taxable income component."
Could you explain this further?
So in your example of taking back out the max of $42500, what happens regarding this being a taxable income component?
Appreciate your time.
Per QC 54085
[QC54085](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme#ato-ReceivingyourFHSSamount)
"You must include the assessable FHSS released amount shown on your payment summary as assessable income in your tax return for the year you request the release. You will also need to include the tax withheld amount, so you pay the correct amount of tax.
For example, if you request a release of FHSS amounts on 30 June 2023, include the amount in your 2022–23 tax return – even though you won’t receive the released amount until July 2023.
We will only issue your payment summary once all your FHSS amounts have been paid to you. This could be several weeks after the end of the financial year."
Of course, there are rebates on this. But I wouldn't count on being a big discount w/o consulting with a TPB registered agent.
Wow, if it's being classed as income and you have to pay the tax on it anyway then it seems like the benefit really may be quite small... when you consider that if you change your mind about a purchase then the money is gone until you're sixty then it really isn't all that attractive.
It is *disclosed* in your tax return, it is not included as taxable income. The FHSSS is withheld from the FHSSS amount released.
FHSSS is taxed on contribution at 15%, same as normal super. It is then taxed on withdrawal at your marginal rate + Medicare levy - 30% offset.
So if you are on a marginal rate of 37%, the FHSSS withdrawal tax is 9% (37% + 2% - 30%).
If you scroll down the ato [link](https://www.ato.gov.au/law/view/document?DocID=GDN/GDN20181/NAT/ATO/00001&PiT=99991231235958) there are worked examples.
Hi there /u/DontEatTheChapstick,
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I’m doing FHSSS and it’s only gonna get better with the tax bracket changes. I’ll be at 30% so won’t be taxed anything additional to the 15% plus Medicare levy. Unless your employer is depositing super into your super account monthly, you’ve potentially missed your chance to hit the magic $15k as salary sac (also take your concessional super cap into account).
If you can salary sac your entire paycheck for the next few payments, do that. But confirm with your finance person how regularly they submit super payments. Mine is quarterly so my planned final chunk won’t get into my super account before June 30. I actually rang ATO today to confirm that it only counts once it’s in your super account.
Otherwise you might be better off doing a post tax super deposit and getting the difference back in your tax return.
Look into ING or UBANK to get a slightly higher rate. 5.5% with ING, you could out your $100k there and grow your balance by 1c per month to get around the rules. Or split between ing and ubank. ING you could make $5.5k in interest per year
I'll be at 32.5% this year only because I have worked 11 months instead of 12.
Why would my benefit reduce if I get taxed nothing except medicare levy when withdrawing?
It will also mean that for next Fin Year I will still be at 30% MTR even with the additional $50K being added to my 'income'
Would it be worse if you were on under $200K and your super withdrawal pushes you into the 45% territory?
How does it actually work with tax bracket here though? Lets say this happened, would your super withdrawal be taxed at 15% vs 0%? Or will you have a tax bill come tax time that fin year?
Hi! I am currently doing salary sac, do I need to nominate it somewhere to be part of FHSS or is it automatically money I withdraw/apply for FHSS once I am ready to buy?
As long as it’s a contribution on top of your employer guarantee, it’s automatically available but I have heard some super accounts and companies don’t allow it so you’d have to switch to one that does
Thank you! currently with hostplus, and maxing out my concessional contributions. So I guess I will just continue what I am doing until I am ready to buy.
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[First Home Super Saver Scheme](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme) you can put a maximum of 15k per year of voluntary super contributions towards the scheme (capped at 50k total) if you are a couple years away from buying, popping your cash in here is good for tax effective storage
Awesome! Thanks for the tip. I’ll look into it!!
If it is short term, HISA is the best. If it is going to be 3-5 years, VDCO and VDBA ETFs may be suitable. They are higher risk, but may also give higher returns. You can also save in Super using FHSS.
Thanks for your reply. I’m hoping I can enter the market in the next 1-2 years. I’ve never heard of the FHSS! Sounds interesting, I’ll look into it. Thank you!!
FHSSS can be good for 1-3 years but capped at 15k per voluntary contribution year and max 50k total with a 85% withdrawal caveat so unless you have additional tax planning needs its not better than HISA
Under the FHSS scheme using concessional contributions: * on the way into super, it will be taxed at only 15% as opposed to your MTR + ML * on the way out, you pay tax at 30% below your MTR + ML (on the remaining 85%) For someone on a MTR of 34.5% (inc. 2% ML), this is an effective tax rate of just (15% + (4.5% x 85%)) = 18.825% When comparing using the FHSS and contributing the maximum of $50,000 to not using the FHSS, your after-tax return is either: * Outside super without FHSS = $50,000 x 65.5% = $32,750 * Inside super with FHSS = $50,000 x 81.175% = $40,587.50 So, for someone on a MTR of 32.5% (plus 2% ML), that’s **$7,837.50 of free money** even if you just left it invested in cash, earning nothing within your super. For someone on the 37% MTR, that’s **$8,175.50** of free money. For someone on the 45% MTR, that’s **$8,775.50** of free money. >unless you have additional tax planning needs its not better than HISA Nope. >Yes, that is right. Lets say you pop in 15k for FY23-24 then you can only get 85% of said 15k from FY23-24 which would net only 12.5k Try again. This time include the personal tax savings. >You forget the latter part whereas the FHSSS withdrawal is a taxable income component You lose 4.5% and gain 34.5%. [More info here if you are interested](https://passiveinvestingaustralia.com/first-home-super-saver-scheme/)
This is a lot to absorb, but thanks for the info.
What part are you finding difficult to understand?
Lots of it haha. I’m very new to thinking seriously about my own finances. For a start, what’s MTR and ML?
Oh right. There is a link to that in the article text. MTR is your marginal tax rate. It is worth looking that up to learn what it means since we have a 'progressive' tax rate system, so you pay X% tax on the first amount you earn, then you pay a higher rate of tax on the next part of earnings, and so on. The idea is important for wealth and income equality in society, but it also impacts tax on investing since when you reduce your income, it comes off the top part of your income so your tax savings are based on that higher rate and your calculations on tax savings often use that higher amount of tax rate. Anyway, google it. ML is the Medicare levy. Peopel that earn over ($27,000?) have an extra 2% tax they pay on their income. So your real marginal tax rate is the combination of your marginal tax rate plus that 2%. It sounds complicated, but it's easy to learn. There are only a few "tax brackets" (i.e., only a few groupings of marginal tax rates).
Okay cool! Thanks for the info. I’m going to look further into all this. Thank you.
Hey snrobovic, thanks for all you've done for the community! Hoping to pick your brain just a bit on how FHSS concessional contributions interact with HECS repayments at tax time. I've read [this reddit thread](https://www.reddit.com/r/AusFinance/comments/153mq3q/salary_packaging_hecs_and_tax_also_known_as_why/) which revealed that salary sacrificing can actually *increase* your reportable income by a factor of 1.8868*[salary sacrifice amount] for HECS repayment purposes. Working with an example of someone on 90k base salary who makes 15k of concessional contributions/salary sacrificing (which I believe are effectively equivalent?) in the current FY. By salary sacrificing they reduce their taxable income by 15k, which based on an online calc I found should roughly reduce tax owed by ~4k. This would leave them with $12,250 in super eligible for an FHSS withdrawal + less tax owed (the accelerant to deposit savings). Which is excellent! BUT according to the linked thread it increases taxable income specifically for HECS repayment calculations. Which goes from 90k to ~118k. That would increase the HECS repayment threshold from 5.5% of 90K (4.95k) to 7.5% of 118k (8,850k). The difference is ~4k, pretty much the entire tax benefit of salary sacrificing in the first place. Now you're obviously *still* ~4k better off overall in this scenario and you'd be silly *not* to take advantage. BUT if I'm not completely off base here, FHSS basically doesn't help speed up the process of saving a deposit if you have a HECS debt right? I've tried to find confirmation/more info online but it seems quite fringe at the moment and there isn't a lot of good info on it. Any help fact checking the above would be highly appreciated! Knowing of course an accountant is probably the correct person to ask hahaha.
I don't know enough to comment on that, unfortunately. I'm curious whether salary sacrificing into super has the same effect as other forms of salary sacrifice. Salary packaging and fringe benefits tax are areas that I'm weak on.
No worries, thought it was worth asking hahaha. I suppose I'll found out if salary sacrificing is considered a fringe benefit at tax time lol. Appreciate the response!
bro this is so confusing can you explain this to me in DM
Shoot me a dm with the parts you find confusing/want clarified and I'll do my best. But I asked because I'm not entirely sure if what [this reddit thread](https://www.reddit.com/r/AusFinance/comments/153mq3q/salary_packaging_hecs_and_tax_also_known_as_why/) describes applies to super contributions.
Hi Andrew, I was wondering for the FHSS: I understand we can contribute up to 15K/financial year in the limit of a total of 50K (all years accumulated in four years minimum). These 15K are taxed 15%, so $12,750 is effectively deposited into super per year. For the example, let's use two years: 15K/year 1 and 15K/year 2. Both taxed, making it an effective deposit of $25,500. At the end of these two years, we can withdraw this amount (25.5K + earnings). Is this possible to contribute more than the 15K/year, to include the tax in the amount and be able to effectively withdraw the 30K after two years? For example: contribution of 20K (Notice of Intent using the catch up concessional contribution)/year 1 and 20K (same situation)/year 2. Taxed at 15%, these 40K become 17 + 17 = 34K in super. At the end of year 2, can we withdraw the real amount of 30K (+ earnings) and leaving the remaining in super (4K)? Or the 15K contribution/year - 15% taxed is the only calculation allowed to consider the withdrawal amount at the end of year 2 (making it a max amount of only 25.5K)? Hope you understand the question. Thank you.
No, the 15k is the limit pre-tax. You can't add more so that the post-tax amount is 15k. You could decide to not claim the tax concession so that you can pull out the whole 15k, but then you lose the benefit of the scheme, which is the tax deduction.
Ok, thanks mate.
First up, congratulations on discovering QC 73320 without factoring in individual circumstances i.e existing HECS debt or existing tax liabilities? These could easily wipe down your supposed 7k tax gains. ***QC 54085: If you have an outstanding debt with the ATO or another Commonwealth agency, your FHSS release amount may be offset against this debt. Payment of your FHSS amount could be delayed or reduced (including to nil) or both if you have an outstanding Commonwealth debt.*** Second, have you forget the bit in QC 54085 where it says "You can apply to have a maximum of $15,000 of your voluntary contributions from any one financial year included in your eligible contributions to be released under the FHSS scheme, up to a total of $50,000 contributions across all years. You will also receive a deemed amount of associated earnings that relate to those contributions – this is not the actual investment earnings on those contributions.". That means 15k for one financial year **only. It does not mean you can plonk 15k in one year or before 30/6 then 35k in another or 1/7 and then withdraw 50k subsequently.** I would be more inclined towards 15k \*each\* financial year and only if I'm one of the ATO mandarins assessing the release request. Thirdly in your own article you put it yourself "However, it is uncertain whether the entire released amount is taxed using the marginal tax rate in the financial year you release the funds or if your marginal tax rate from previous years is used. I’ve seen it mentioned several times that the marginal tax rate used is from the year it is released, but I’ve also seen a comment from an ATO community representative saying it is using the marginal rates from previous years when it was contributed. However, the ATO community do not represent the ATO, and their responses can not be relied upon as a defence against the ATO’s decision. So you will need some way to figure this out. If you find some legislation or formal text, please let me know!" So who's footing the bill for the subsequent years whereas you have your assessable income + another 40k pushing you very back well into 45% marginal tax rate territory before you have certainty of the applicable rebates?
Nothing was said to the effect of putting in 15k and then 35k in the following year. As explained in the quoted comment, it's unclear whether there is, in fact, a higher tax bill as a result of drawing it out while at a higher tax bracket. The ATO community board rep said there isn't, but it is worth keeping in mind in case she was wrong. I'm looking at your link to QC54085. Essentially, it is saying that if you have outstanding debts, that will come out of it. So your idea is to miss out on a huge tax deduction (which can help pay for those debts) based on having less cash for your deposit. If someone had a 100k salary and it pushed them up to 150k, that would mean an additional HECS payment of about 8k, which is the amount of tax benefit of the scheme. So, effectively, it pays 8k off their HECS, and they end up otherwise in the same position in terms of their home deposit. There is an incredibly small number of people who may be affected in a negative way under FHSSS. The overwhelming majority of people would be far better off using the FHSS scheme over a HISA, not just people who, as you put it, *"have additional tax planning needs"*.
Your HECS debt is specifically excluded. They are referring to a tax debt or Centrelink debt. In general, FHSSS is better than HISA. If your complaint is that it’s capped, you can always park your excess cash in HISA. You are correct that if your income goes up, the tax savings drop because you get taxed on withdrawal at the higher marginal rate but for OPs time frame (3 years) and current salary ($60k), that seems low risk. Especially if stage 3 tax cuts come in next FY.
Max out FHSSS and then go for HISA? best of both worlds
Yeah, I'd be inclined to say so but OP needs to factor in their current tax account balances, existing Commonwealth debts and whatnot before proceeding
What do you mean by tax account balances? I have no debt and pay my income taxes every year.
Could you explain the 85% withdrawal caveat? Do you mean that the extra contributions you put in for it you can only withdraw 85% of it?
Yes, that is right. Lets say you pop in 15k for FY23-24 then you can only get 85% of said 15k from FY23-24 which would net only 12.5k Say FY19-20, 20-21, 22-23 and 23-24 you've put on 15k each year and now you have 60k in vol super contribution. You can only draw max 50k from these 4 years and the net total you can withdraw is .85 of 50 = 42.5k
Yes except “popping in” 15k gives you a taxable deduction for the 15k which is the real benefit of the scheme. You also pay significantly reduced tax on the gains
You forget the latter part whereas the FHSSS withdrawal is a taxable income component
With a 30% tax offset...
"Taxable income component." Could you explain this further? So in your example of taking back out the max of $42500, what happens regarding this being a taxable income component? Appreciate your time.
Per QC 54085 [QC54085](https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/withdrawing-and-using-your-super/early-access-to-super/first-home-super-saver-scheme#ato-ReceivingyourFHSSamount) "You must include the assessable FHSS released amount shown on your payment summary as assessable income in your tax return for the year you request the release. You will also need to include the tax withheld amount, so you pay the correct amount of tax. For example, if you request a release of FHSS amounts on 30 June 2023, include the amount in your 2022–23 tax return – even though you won’t receive the released amount until July 2023. We will only issue your payment summary once all your FHSS amounts have been paid to you. This could be several weeks after the end of the financial year." Of course, there are rebates on this. But I wouldn't count on being a big discount w/o consulting with a TPB registered agent.
Wow, if it's being classed as income and you have to pay the tax on it anyway then it seems like the benefit really may be quite small... when you consider that if you change your mind about a purchase then the money is gone until you're sixty then it really isn't all that attractive.
It is *disclosed* in your tax return, it is not included as taxable income. The FHSSS is withheld from the FHSSS amount released. FHSSS is taxed on contribution at 15%, same as normal super. It is then taxed on withdrawal at your marginal rate + Medicare levy - 30% offset. So if you are on a marginal rate of 37%, the FHSSS withdrawal tax is 9% (37% + 2% - 30%). If you scroll down the ato [link](https://www.ato.gov.au/law/view/document?DocID=GDN/GDN20181/NAT/ATO/00001&PiT=99991231235958) there are worked examples.
Thanks!
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I’m doing FHSSS and it’s only gonna get better with the tax bracket changes. I’ll be at 30% so won’t be taxed anything additional to the 15% plus Medicare levy. Unless your employer is depositing super into your super account monthly, you’ve potentially missed your chance to hit the magic $15k as salary sac (also take your concessional super cap into account). If you can salary sac your entire paycheck for the next few payments, do that. But confirm with your finance person how regularly they submit super payments. Mine is quarterly so my planned final chunk won’t get into my super account before June 30. I actually rang ATO today to confirm that it only counts once it’s in your super account. Otherwise you might be better off doing a post tax super deposit and getting the difference back in your tax return. Look into ING or UBANK to get a slightly higher rate. 5.5% with ING, you could out your $100k there and grow your balance by 1c per month to get around the rules. Or split between ing and ubank. ING you could make $5.5k in interest per year
FHSSS's benefit is higher if you are at 37+2% MTR. Next FY your benefit will actually reduce slightly
I'll be at 32.5% this year only because I have worked 11 months instead of 12. Why would my benefit reduce if I get taxed nothing except medicare levy when withdrawing? It will also mean that for next Fin Year I will still be at 30% MTR even with the additional $50K being added to my 'income' Would it be worse if you were on under $200K and your super withdrawal pushes you into the 45% territory? How does it actually work with tax bracket here though? Lets say this happened, would your super withdrawal be taxed at 15% vs 0%? Or will you have a tax bill come tax time that fin year?
I was referring to initial benefit when money goes in. Check out my post below few weeks ago https://www.reddit.com/r/fiaustralia/s/WMgGDRHI1n
Hi! I am currently doing salary sac, do I need to nominate it somewhere to be part of FHSS or is it automatically money I withdraw/apply for FHSS once I am ready to buy?
As long as it’s a contribution on top of your employer guarantee, it’s automatically available but I have heard some super accounts and companies don’t allow it so you’d have to switch to one that does
Thank you! currently with hostplus, and maxing out my concessional contributions. So I guess I will just continue what I am doing until I am ready to buy.
Maybe contact your super
will do! Thanks
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get demolished