Salary sacrifice can be a win-win situation
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What is it?
The 9.5% super guarantee contribution is probably not enough to get by for a comfortable retirement. You can choose to save more by making salary sacrifice payments – putting more of your pre-tax salary into super.
How it works
Your employer puts more of your salary into your super rather than paying it to you as part of your take-home pay. This can boost your balance and also reduce your taxable income. Salary sacrifice contributions are taxed at just 15% (30% for incomes over $300,000), which may be much less than if that money had been taxed as part of your take-home pay.
It is important to check that your employer's 9.5% super guarantee contribution will not be impacted by any salary sacrifice. For most employers it does not, but it is best to check first.
How to do it
- Speak to your employer about making before-tax salary sacrifice payments into your super account. Most employers do this but not all - so it’s best to check first.
- If that’s ok, fill out our Payroll deductions eform below with the amount that you want to put towards your super. Some companies may have their own form – which is ok, because all of the important information will be the same.
- Then, return the form to the payroll department and ask them to organise the payments – it’s that easy!
Click on the button below to complete a Payroll deductions eForm.
John is age 45 and has an income of $65,000 before tax. This is too high for co-contribution, which cuts out at $50,454. However, he decides to salary sacrifice $10,000 to his NGS Super account (this will not exceed his concessional contribution limit of $30,000).
He gains a net tax benefit, saving $2,100. This takes into account his Low-Income Tax Offset.
As with any financial decision, it's best to get professional financial advice about your situation. For more information call the NGS Super Customer Service Team on 1300 133 177.