Each month, several deductions are made directly by your employer, one of these contributes directly to the superannuation funds. All employees contribute a certain percentage of their income towards this pool of funds. Even though you might not experience the advantages of the funds presently, the fund plays a critical role in your life. Below are several reasons why superannuation funds are important to you.
Making these contributions monthly results in lower taxes. The amount that each person contributes is tax-exempt, which means that you will only pay taxes on the remaining balance. If you calculate the total amount saved throughout a year, the sum will be significant. As such, these funds offer a legal and acceptable solution to paying a lower tax bill. Additionally, once the amount is collected, you will not be taxed again in future when you start receiving your monthly contributions.
Although these deductions will benefit you, they are also compulsory if you are earning an income. According to the law, employers are expected to submit this amount every month. Failure to do so can result in huge fines and jail terms. A business can also lose its operating licence for failing to forward these contributions to the relevant authorities. As an individual, you should ensure that your contributions are made monthly and also keep track of your balance. Using your tax file number, you can go online and check your balance. You can then compare them with your records to determine that it has been updated. It can be a huge inconvenience for an employer to be deducting the sum monthly, but your balance has not been updated. The situation can be worse if you detect it after several months have elapsed. Not only would you have lost your money, but you will also be at risk of being prosecuted and liable to pay the corresponding fines.
The most important reason why you should contribute to the superannuation fund is that it will directly benefit you. What will happen when you grow old and lack the energy to work on a daily basis? As one grows older, these are the type of questions that start crossing their minds. To avoid such issues, ensure that all payments are made promptly. Once you retire, you will be assured of some money to cater for your daily expenses. This prevents you from being a burden to younger members of your family.
For more information, contact taxation services in your area.