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Salary Sacrifice

Superannuation contributions made through salary sacrifice.

A ‘salary sacrifice’ superannuation contribution is an agreement between you and your employer where you choose to 'sacrifice' part of your before tax salary and pay it directly into your super account.

The benefit of doing this is that it reduces your taxable income, whilst increasing your superannuation savings for retirement.

 

Contribution caps

Under 50 years of age
If you are under the age of 50 you'll be taxed at 15% for the first $25,000 of before-tax contributions (includes both employer and salary sacrifice contributions) to your super fund every year.

Any before-tax contributions received above this $25,000 cap will be subject to the contribution tax of 15% as well as being individually assessed for a further 31.5%.

Caps apply to the 2011-12 financial year and may be indexed from time to time.

50 years of age or over
Until 30 June 2012, there are transitional arrangements that allow anyone aged 50 or over to make up to $50,000 of before-tax contributions (includes both employer (SG) and salary sacrifice contributions) at the concessional tax rate of 15%. So if you turn 50 prior to 30 June 2012, you'll benefit from the higher cap.

Super Co-contribution

Salary sacrifice contributions may have tax advantages for you, however, the Super Co-contribution will not apply.

To be eligible for the co-contribution your personal contributions must be after tax.

Need more Information?

Read more on our Salary Sacrifice Fact sheet and our Superannuation Fact sheet.

To properly evaluate the best way for you to make contributions, you should seek professional financial advice.  

Want to know more about salary sacrifice? Contact Us or call 1300 655 002 (Mon-Fri 8.00am-5.30pm AEST).

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