Is that possible and legal to fund my super by setting up a company, funding the company, and paying super to myself?
Is there a limit or restriction?
Just come up with an idea like this and wondering if it's possible
Disclaimer: I am just wondering the feasibility of the idea. I am not encouraging or attempting any form of tax evasion.
so that i can put as much money as i can to my super
How much bitcoin are you trying laundry?
laundry?
Of course it's possible. I've got nearly 20 employees on my company payroll including myself and wife.
Of course there are limits to contributions. Setting up a company won't bypass any limits.
but then u can pay more super as an expense to lower the profit of the company
Yes and no. In your original post you've only raised the issue of setting up a company to pay super to yourself, and in this post you're now talking about paying super out of the company to lower the company's profits. These two "ideas" aren't really related to each other. If you breach the contribution caps you'll end up paying for it one way or the other. Think you need to speak to an accountant rather than assuming establishing a company structure is somehow going to magically generate money out of thin air. Don't get me wrong, my company structure is amazing for me, but this doesn't mean it's going to work for you. And for gods sake don't setup a company just because ozbargainers told you to. Next thing you'll end up doing is hiring bikies and buying $80,000 investment cars.
Why not just setup a company with everyone in your family or friends (who don't already have a taxable income) as an "employee" and pay each of them a salary amount that's within the lower tax brackets.
Then you claim all those salaries as tax deductions for the company and get them to pass you back most of those "salaries" to you in cash.
Of course, there are other considerations like payroll tax and administration, but the concept is there.
oh, i should have chosen accounting in Uni :(
It sounds fun
Also other considerations such as the consequences of tax evasion (including jail time)
what about listing grandparents into it, pay $25000 super to them, and cash out immediately haha
@owen199618:
This is basically the transition to retirement super strategy. Yes, it is a rort.
The grandparents would need to be able to demonstrate they are actually working.
what about listing grandparents into it, pay $25000 super to them, and cash out immediately haha
That payment would be subject to contributions tax of 15%. (ATO has last laugh haha)
Is that possible and legal to fund my super by setting up a company, funding the company, and paying super to myself?
What exactly are you trying to achieve by doing that?
The tax benefits of salary sacrifice (concessional) contributions? The limit for this year is $25,000. Note that SG/Employer Contributions (also concessional) also count towards this cap.
If you're not after the above tax benefits, then you can simply send in a cheque to be deposited into your super account as a non-concessional contribution. That's capped at $100,000 each year.
Exceed these caps and you'll be hit with a tax equivalent to the highest marginal tax rate - about 47%!
thx.. i know how it works now
So there is no bug in the system :(
I work in the industry and, in my free time, I think about it sometimes. Actually, it's not sometimes - it's quite often! ;)
You will lose half of your super in the next market crash.
Buy an investment outside of super such as a property
You can hold almost any investment in super. It is just a tax efficient vehicle. Buying property in or out of super won't effect whether it goes up or down.
Much harder yo get a property loan with smsf due to non recourse structure
True, you need approx 30% deposit.
On the assumption that you are not doing anything dodgy, there is no need to go through all this hassle.
Without going into all the detailed bits and pieces (i.e. assuming you are eligible to contribute to super, not going into age limits, existing balance limits, etc.), you can contribute up to $25k per year in concessional contributions (including any such contributions already made by your employer under the superannuation guarantee or other arrangement).
You can further contribute up to $100k per year in non-concessional contributions (or you can use the three year "bring forward" to contribute $300k).
All of this can be done without needing to set up a company, etc., etc. What is it you are trying to achieve?
On the assumption that you are not doing anything dodgy
I think your assumption is incorrect! haha ;)
You seem really excited about some pretty standard features of superannuation.
You can contribute up to $25k p.a. and get the concessional contributions tax rate.
You can contribute a lot after tax as well. It then pays concessional tax on earnings.
There is a limit ($1.6m from memory) that an individual can hold and still get concessional taxation advantages.
The only drawback is you can't withdraw until you are 60yro, and assuming you are still some years from that, I would urge you to consider the gov may up that age to 65 or 70 before you get there…
God help us if the OP ever hears about discretionary trusts!
SMSF - Self Managed Super Fund. Lots of information available on the Internet so you can research. Restrictions on how much super you can voluntarily contribute into the SMSF, how the fund will invest, and when you can access the funds contained within.
Don't forget the fund and your company also cost money to run, and also have tax liabilities, etc.
The big question is what are you trying to achieve by setting up your company and paying super into it… You may be able to achieve these goals ways other than setting up companies/SMSFs…