About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Tuesday, October 21st, 10:08PM
rss
Latest Headlines

Thousands of taxpayers sacrifice more than salary to Government

The Government just needs to provide the same opportunities across all tax brackets, for everyone, says Linda McCulloch

Tuesday, April 3rd 2001, 6:03PM

Up to 80,000 taxpayers may be gifting the Government thousands of dollars because they do not know how to make the most of a new rule on superannuation savings, says Linda McCulloch, Manager Corporate Markets for AMP Financial Services.

In April 2000 the Government introduced a new top tax rate of 39% for annual income over $60,000. Meanwhile, the Specified Superannuation Contribution Withholding Tax – SSCWT – applicable to employer contributions made to registered superannuation schemes, remains at a flat rate of 33%.

"People earning over $60,000 a year could be channelling money into retirement savings and gain a 6% tax advantage," Linda McCulloch said in a speech to an IIR Remuneration, Pay & Incentives conference in Wellington today.

AMP provides the largest employer sponsored superannuation Master Trust in New Zealand, with more than 800 companies and 15,000 members.

"We’ve received numerous requests from employers and employees, asking how they can best utilise this opportunity. They’re asking because the Government has not spelled out the changes and benefits to those New Zealanders who can most afford to save," she says.

For example, an employee on $75,000 elects to sacrifice 10% of their salary and have it deposited into a superannuation scheme by their employer.

"This will generate $667.50 per annum more in savings than if they had deposited it themselves. Not a large amount, but compounded over a 10 year period and attracting additional investment earnings – also taxed at 33% instead of 39% - it creates additional savings of $8,605.50.*

"The benefits are clear; pay less tax, increase retirement savings and painless saving all through employers.

"While 80,000 taxpayers have this opportunity and incentive to save more, 1,058,600 taxpayers in other tax brackets do not currently receive the same equity of opportunity as those earning over $60,000," she says.

The current provision does seem to be elitist, says Linda McCulloch but AMP is encouraged at the Government’s interest in equity for all taxpayers.

"Our own research shows that 92% of New Zealanders expect to take some responsibility to provide for themselves in retirement and 74% believe they have the greatest responsibility to provide for themselves.


(
*Based on a constant $75,000 salary plus investment earnings of 5% net on extra amount saved.)

"The benefits are obvious and the will is there. The Government just needs to provide the same opportunities across all tax brackets, for everyone," says Linda McCulloch.

Linda McCulloch is AMP Financial Services Corporate Markets Manager

« "Superannuation - Let's Get It On"AMP & Good Returns launch superannuation website »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites

MORE NEWS BITES»

Latest Comments
Subscribe Now

News and information about KiwiSaver

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AMP Home Loans 7.24 ▼5.69 6.39 6.65
AMP Home Loans $200k+ 7.14 ▼5.59 6.29 6.55
AMP Home Loans LVR <80% - - ▲5.99 ▼6.19
ANZ 6.74 6.15 ▼6.39 6.49
ANZ Special - ▼5.69 ▼5.75 6.09
ASB Bank 6.75 6.09 6.40 6.65
ASB Bank Special - 5.70 ▼5.75 6.19
BankDirect 6.75 6.09 6.99 6.65
BankDirect Special - 5.70 ▼5.75 6.19
BNZ - Classic - - ▼5.75 6.19
BNZ - GlobalPlus 6.74 ▼5.89 6.39 6.59
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.15 - - -
BNZ - Rapid Repay 6.74 - - -
BNZ - Std, FlyBuys 6.74 ▼5.89 6.39 6.59
BNZ - TotalMoney 6.74 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.45 6.05 6.20 -
Credit Union North 6.45 - - -
Credit Union South 5.75 - - -
eMortgage 6.04 6.15 6.69 7.19
Finance Direct 6.10 6.45 6.69 7.10
First Credit Union 6.45 - - -
Lender Flt 1yr 2yr 3yr
General Finance 5.95 6.25 6.50 7.10
HBS Bank 6.65 5.85 5.99 6.19
HBS Special - - - 5.89
Heartland 6.70 7.00 7.25 7.85
Heretaunga Building Society 6.70 6.00 6.50 -
Housing NZ Corp 6.74 5.99 6.39 6.59
HSBC Premier 6.84 5.95 5.95 6.39
HSBC Premier LVR > 80% - 5.75 5.75 5.75
HSBC Special - - - -
ICBC 6.75 5.99 6.39 -
Kiwibank 6.65 5.79 6.39 6.65
Lender Flt 1yr 2yr 3yr
Kiwibank - Capped 5.65 6.50 - -
Kiwibank - Offset 6.55 - - -
Kiwibank LVR > 80% - - 5.89 6.19
Liberty - - - -
Napier Building Society 5.80 6.00 6.70 -
Nelson Building Society 6.95 6.15 6.60 -
NZ Home Loans 6.85 6.09 6.40 6.65
Perpetual Trust 7.70 - - -
Resimac 6.59 6.35 6.58 6.77
SBS Bank 6.65 5.85 5.99 6.19
SBS Bank Special - - - 5.89
Lender Flt 1yr 2yr 3yr
Silver Fern 5.95 6.10 6.55 7.05
Sovereign 6.85 6.09 6.40 6.65
Sovereign Special - 5.70 5.75 6.19
The Co-operative Bank 6.70 ▼5.70 ▼5.89 6.19
TSB Bank 6.74 5.95 6.19 6.30
TSB Special - - 5.79 -
Wairarapa Building Society 6.20 5.75 5.95 -
Westpac 6.59 6.09 6.39 6.65
Westpac - Capped rates - 6.74 6.99 -
Westpac - Offset 6.59 - - -
Westpac Special - - ▼5.75 6.19
Median 6.70 6.00 6.39 6.52

Last updated: 22 October 2014 7:07am

News Quiz

In a study of performance fees by Pathfinder, how many of the 10 equity PIE funds reviewed have to achieve a margin over and above their benchmark before performance fees kick in?

10

9

7

5

2

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by PHP Developer and eyelovedesign.com