Salary sacrifice
Salary sacrifice is an arrangement between you and your employer where you choose to give up or 'sacrifice' part of your before-tax salary to add it directly into your superannuation account.
By doing this you effectively reduce your gross (taxable) salary, which means you could pay less income tax. As superannuation contributions are taxed at a flat 15% (equal to the lowest marginal rate of tax), then the sacrificed amount could be more favourably taxed than if taken as cash salary.
IMPORTANT NOTE: From 1 July 2007, there is a limit on Concessional Contributions (employer Superannuation Guarantee, salary sacrifice and other employer contributions) of $50,000 a year. If you exceed this limit the contributions will be taxed at the highest marginal tax rate of 46.5%.
Boosting your super savings
Just $25 extra a week from age 35 could add $58,500 to your final retirement income. An extra $50 a week could add $117,000. That's a small extra saving now to get the lifestyle you want in retirement. The earlier you start, the better the result.
Our online salary sacrifice calculator will show you a personal example of how salary sacrifice could boost your super.
To begin making salary sacrifice contributions, check with your employer and complete the salary sacrfice contribution form and hand it your employer.
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