Salary Sacrifice

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Salary sacrifice is an agreement between you and your employer where you choose to deposit or 'sacrifice' part of your before tax salary to pay it directly into your super account.

This reduces your taxable income, whilst increasing your superannuation savings for retirement.

Contribution caps

Under 50 years of age
Effective 1 July 2009, 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 taxed at the highest marginal rate of 46.5% including the Medicare levy.

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 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.

More Information

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

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