The lead up to the end of tax year is always a great time to reflect on your goals, tie up loose ends and take steps to improve your financial strategies as a contractor. In these unprecedented times when many people are experiencing changes to work and income, it’s even more important to make smart decisions to boost your super, reduce tax, maximise government entitlements and build wealth.

Take advantage of Super Contribution Caps

If you’ve maintained a strong income consider maximising your super contributions now. Putting that money into super now will sure up your future and stop your lifestyle expenses from soaking up the extra income you’ve earned.

There are several strategies you can use to do this, including:

  • concessional (pre-tax) contributions of up to $25,000 per annum (including any employer and salary sacrifice contributions)
  • non-concessional (after tax) contributions of up to $100,000 per annum,
  • spousal super contributions,
  • contribution splitting, and
  • contribution of proceeds from the sale of your principal residence (so called downsizing contributions).

To be eligible in this financial year, contributions must be received by your super fund by 30 June. Note that due to the processing systems of many super funds and the extra workload at this time of year, the final submission dates are often a earlier than this so it’s best to get your contribution in a soon as possible.

Reduce your tax by making a one-off super contribution before June 30

Super is taxed at a maximum of 15%, while earnings on your investments outside of super are taxed at your marginal rate. Making a super contribution allows you to shift the earnings on your investments to a potentially lower tax environment.

If you earn under $50,454 you may qualify for the Government co-contribution

Provided at least 10% of your income is from employment, the Government will boost your retirement savings by up to $500. Eligibility conditions apply, so talk to your adviser.

Salary sacrifice part of your pre-tax salary or bonus

Take advantage of low tax rates on super by diverting part of your pre-tax salary to super instead of taking it as cash.

Boost your spouse’s super and reduce your tax

If your spouse earns less than $13,800, you can make an after-tax contribution to their super and grow their retirement savings whilst you gain a valuable tax offset.

Use your tax refund to reduce non-deductible debts or add to super

As tempting as it may be to splurge, paying off debts like your home loan or contributing extra to super is a more effective way to use your refund.

Help someone else in need

If you have taken advantage of the above opportunities and still have available cash you may want to donate to a charity to help someone else through these tough times. Most charity donations are fully tax deductible and have the added bonus of making you feel great too.


This article was written by our partners at FMD Financial. For more advice contact your FMD adviser, Nick Stanley, to arrange a free financial health check.

Nick Stanley, Senior Financial Adviser – Melbourne CFP® BCom GDipFin

Nick specialises in providing strategic advice in relation to superannuation, retirement income streams, wealth creation, personal and business insurance, investment portfolios, managed funds and asset allocation. Nick has been involved in the financial services industry since 1998. Prior to working at FMD Financial, he was employed in various roles within the superannuation and wealth management areas of a global consulting firm. Nick commenced his employment with FMD Financial in April 2007. He has a Bachelor of Commerce degree as well as a Graduate Diploma of Financial Planning and is a Certified Financial Planner™ professional.

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About FMD Financial

We’re a team of qualified, experienced financial advisers in Melbourne, Brisbane and Adelaide who want more people to enjoy good health, wealth & happiness. We can’t give you the formula for financial success but we know from 15 years’ experience working with highly satisfied clients that making the right move in six key pillars of financial management can help you achieve your goals. Our proven advice process and open and transparent fees can help you take control of your finances, bring you greater peace-of-mind and improve the lifestyle you can afford at every stage of life.

This article has been prepared by FMD Financial and is intended to be a general overview of the subject matter. The information in this article is not intended to be comprehensive and should not be relied upon as such. In preparing this article we have not taken into account the individual objectives or circumstances of any person. Legal, financial and other professional advice should be sought prior to applying the information contained in this article to particular circumstances. FMD Financial, its officers and employees will not be liable for any loss or damage sustained by any person acting in reliance on the information contained on this article. FMD Financial Pty Ltd ABN 64 153 896 078is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977. The FMD advisers are Authorised Representatives of FMD Advisory Services Pty Ltd AFSL 232977.