Salary sacrifice is when your employer pays some of your salary into your super, before tax has been deducted.
In addition to helping your super grow, salary sacrifice contributions could help reduce the income tax you pay, especially if you’re a high income earner.
How to make salary sacrifice contributions
Talk to your employer if you want to set up salary sacrifice contributions and they’ll be able to help you.
We can accept your contributions if you’re:
- Under age 65
- Between age 65 and 75 and have been gainfully employed for at least 40 hours in 30 consecutive days during the financial year in which you want to make the contribution.
How much can you contribute?
For the 2016-17 financial year, the limit on the amount of concessional contributions you can make at the concessional rate is $30,000 per financial year. The concessional cap is $35,000 for those aged 49 years and over from 30 June 2016.
Keep in mind that these limits (the Concessional contribution caps) include your Superannuation Guarantee contributions made by your employer. Extra tax will apply to any amount paid into your super that’s over the limit.
The Federal Government has also introduced from 1 July 2012, individuals with a taxable income greater than $300,000 pa will pay 30% tax on their concessional contributions.
Are you receiving Government assistance?
Remember that salary sacrifice contributions form part of your total assessable income, which means they’ll be included in your assessment for many government assistance programs, including:
- Income support payments
- The Government’s co-contribution scheme.
For more detailed information, download the How super works booklet.
Want to talk to someone about making contributions? Call our friendly Client Services team on 1300 65 18 65.
For personalised advice tailored to your needs, consider talking to a Financial Planner.
The information provided is of a general nature. In providing this information we have not taken into account your objectives, financial situation or needs. Further, we recommend that professional financial advice should be sought from a qualified adviser with regard to your objectives, financial situation and needs before considering or acting on the appropriateness of the information given.