Salary sacrifice

Salary sacrifice can be a win-win situation

What is it?

The 9% super guarantee contribution is probably not enough for a comfortable retirement. You can save more by choosing to salary sacrifice – putting more of your pre-tax salary into super.

How it works

Your employer pays more of your salary into your super rather than paying it to you as take-home pay. It can boost your balance and also reduce your taxable income. Salary sacrifice contributions are taxed at just 15%, well below the income tax most people pay.

Use the Extra contribution calculator to see how you can grow your super.

How to do it

Speak to the person who pays your salary and ask if salary sacrifice is available to you. It usually is. Then you simply organise it with your employer.

Case study

You can use a combination of salary sacrifice and personal contributions to qualify for the government co-contribution.

John has an income of $65,000 before tax. This is too high for co-contribution, which cuts out just above $60,000. However, he decides to salary sacrifice $10,000 to his NGS Super account.

He gains a tax benefit, saving $1,650.

As with any financial decision, it's best to get professional financial advice about your situation.