Salary sacrifice is when you request that your employer pays part of your pre-tax income1 into your super.
Topping-up your super with salary sacrifice contributions may assist with tax savings (depending on your circumstances) and help you reach your retirement goals sooner; as salary sacrifice contributions are taxed at 15% instead of marginal tax rates(which could be up to 47%).2
How do I start?
You can set up salary sacrifice in three easy steps:
- Talk to your Payroll Manager at your place of employment, to find out if they allow salary sacrifice and the process of making salary sacrifice contributions towards your superannuation.
- Check if salary sacrifice will impact on other benefits you receive, like overtime and leave loading; it is recommended that you obtain professional advice on whether salary sacrifice suits your personal needs. Club Super offers access to financial planning through Club Super Financial Planning.3 To access personal financial planning advice please call 1300 369 330.
- Decide how much you want to salary sacrifice and notify your employer.
Is there anything I need to be aware of?
Salary sacrifice contributions count towards the concessional contributions limit . Contributions made in excess of this limit may be subject to additional tax.
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1 Income is defined as assessable income plus reportable fringe benefits (RFB) plus reportable employer superannuation contributions (RESC). RESC is generally superannuation contributions which you have asked your employer to make as salary sacrifice (before tax) or additional employer contributions (in addition to Superannuation Guarantee or award contributions) paid on your behalf as part of a remuneration package. Consult your employer to identify if you have any RFB or RESC for the financial year. Refer to the ATO website for more information.
2 This rate includes the 2% Medicare levy.
3 Club Super Financial Planning advice is provided by My Super Future Pty Ltd (ABN 38 122 977 888) Australian Financial Services Licensee (AFSL no. 411440). The Trustee is not responsible for, and does not accept liability for the products or services or actions of My Super Future Pty Ltd. You should use your own judgment before taking up any product or service offered by My Super Future Pty Ltd.