Benefiting from salary sacrificing
Salary sacrificing is putting aside some of your pre-tax pay into your super for a financial benefit later on. You can choose to set up an arrangement with your employer for some of your pay to go straight into your super fund, rather than into your bank account with the rest of your salary.
It may help you save on tax (because the money going into your super is from your salary before tax has been taken out), as well as grow your super balance. The benefit is that instead of paying tax on your sacrificed amount at your marginal rate, your sacrificed contribution is taxed at the concessional rate of 15%. This concessional tax rate is lower than even the lowest marginal tax rate.
example
Lauren earns $60,000 p.a. and her marginal tax rate is 32.5%. Lauren decided to ask her employer to salary sacrifice $100 per month into her Super account. These $100 contributions will be taxed inside her super fund at 15%, which is the concessional rate.
If you salary sacrifice some of your pay, this is in addition to the general 11.5% of your salary that your employer is already paying (known as Super Guarantee).
Get started
Just complete this top-up form and give it to your employer and they’ll take care of the rest for you.
Things to consider
There are a few things to think about before you get started.
- Don't forget to discuss this arrangement with your employer to ensure your salary sacrifice contributions will be in addition to your regular employer contributions.
- Be aware of the concessional contribution cap (currently $27,500) which is how much super you can pay into your account each year before you start getting taxed at a non-concessional rate.
- There may also be other tax consequences, so it’s worth speaking with a licensed financial adviser before you start or visit the ATO for more information.
