Here’s a tip that can potentially save you thousands of dollars. Check that your super fund has your tax file number (TFN).
If you joined a super fund before July 2007, or started your current job before July 2007, then your fund may not have your TFN. Effective since 1 July 2007, when you give your TFN to your employer on a TFN declaration (NAT 3092), your employer must forward your TFN to your super fund.
If you’re not sure whether your fund has your TFN, check your member statement from your fund, or contact your super fund. If your super fund doesn’t have your TFN, you can expect the following to happen:
- No TFN: More tax on concessional contributions. If your super fund doesn’t have your TFN, then your employer’s Superannuation Guarantee contributions, and any other concessional (before-tax) contributions, are subject to 46.5% (top marginal tax rate plus Medicare levy) rather than 15%. If you’re eligible to claim tax deductions for super contributions, and your super fund doesn’t have your TFN, then expect the same tax hit.
- No TFN: Forget about non-concessional contributions. You cannot make non-concessional (after-tax) contributions unless your super fund has your TFN.
- No TFN: Forget about receiving the co-contributions. If your super fund doesn’t have your TFN, then you cannot make non-concessional contributions which means that you cannot participate in the co-contribution scheme. You can read about the co-contribution scheme in the SuperGuide.com.au article Cashing in on the co-contribution rules (2010/2011).
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Note: If you run your own fund (that is, a self-managed super fund), then your personal TFN should already be in your fund’s records, but check anyway.
This article first appeared on www.SuperGuide.com.au, a free and independent website on superannuation for consumers. This article is written by Trish Power, co-founder of consumer information website, www.SuperGuide.com.au, and author of Superannuation For Dummies (Wiley) and DIY Super For Dummies (Wiley)