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Salary sacrificing into super

Pay some of your pre-tax salary into super

What is salary sacrificing into super?

Salary sacrificing into super is an agreement between you and your employer to pay some of your pre-tax salary as contributions into super. Doing this can also be tax effective. The amount you contribute to super is taxed at up to 15% (and up to 30% if your income is over $250,000 per annum) rather than your marginal tax rate, which might be up to 47%. Salary sacrificed amounts to super are concessional contributions.

Ready to add to your super?

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How does it work?

  1. Start by talking to your employer about your options to set up a salary sacrifice arrangement and how much you’d like to deduct from your pay. And, to understand if it will impact any other employment entitlements such as termination payments, bonuses and other benefits.
  2. If it is right for you, complete our salary sacrifice form and give it to your employer so that they can set up the contributions from your before-tax pay into your super. Alternatively, your employer may have their own process.

What are the benefits?

  • Your additional contributions happen automatically and by paying less tax, you can have peace of mind knowing that your money is working harder for your future.
  • The power of compound interest and your additional contributions can grow your super significantly quicker over time as interest earns interest on itself.
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Is salary sacrifice right for me?

It could be, but first check that you’re eligible to contribute to super and that:

  • Salary sacrifice will reduce your take home pay so consider whether it will fit with your personal circumstances and financial commitments. Depending on your level of income, it can be a very tax-effective way to contribute more to your super. Try using the MoneySmart Super contributions optimiser to see how salary sacrifice can work for you.
  • Salary sacrifice contributions count towards the concessional contributions cap and tax penalties may apply if the cap is exceeded.
  • There is no benefit in salary sacrifice over voluntary after-tax contributions if you do not pay tax (generally if your taxable income is less than $21,884 pa).
  • And remember, you can’t access your super until you meet a condition of release such as reaching your preservation age and retiring.
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See if your retirement planning is on track and explore things you can do if it's not.

We’re here to help

If you value the experience of experts in other aspects of your life, don't discount it when it comes to your financial wellbeing, including your super.

A financial adviser can help you identify ways to grow your super. So, start the conversation to see how a financial adviser can help you. If you don’t have one, give us a call and we can help you find one near you.

Consolidating your super by bringing it together in one place can be one of the most effective ways to grow your super, by no longer paying multiple fees and potentially multiple insurance premiums.

Voluntary contributions are money that you contribute into your super from your after-tax income or other money that you can invest. These are also known as non-concessional contributions.

Do you have more super than your spouse? You could add to their super and both enjoy the benefits of less tax and more super for retirement.

There’s a solution if you feel like you’ve missed the boat when it comes to building your retirement savings due to expenses or time-out raising kids, study or parents’ aged care.

If you’re a lower or middle-income earner, you might be eligible to receive a Government boost to your super.

The downsizer contribution allows eligible Australians aged 65¹ or older to sell their home and contribute up to $300,000 of the proceeds into their super.

Important information

The information on this web page is of general nature only and has been prepared on behalf of the Trustee without taking into account your objectives, financial circumstances or needs. Before acting on any of this information, you should consider whether it is appropriate to your objectives, financial circumstances and needs, and seek appropriate professional advice. You should not rely on this information to determine your personal tax obligations, please consult a registered tax agent for this purpose.

1The 2021/22 Federal Budget proposed reducing the eligible downsizer contribution age from 65 to 60 from 1 July 2022. No legislation has passed to support this measure.