SALARY SACRIFICE

You can increase your final benefit by paying extra into your superannuation. Salary sacrificed contributions are contributions deducted from your salary before tax. This arrangement reduces your taxable income and, as a result, reduces the amount of income tax you pay. This could mean that your take home pay increases at the same time as your superannuation increases (because of the additional contributions).

There are a number of positives to salary sacrificing your personal contributions. There are also some negatives so we suggest you seek financial advice before entering into a salary sacrifice agreement.

Important notes:

Salary sacrifice contributions are counted towards the annual limit for “concessional” contributions.  See the “Concessional Contributions" page for more details on the annual caps.

From 1 July 2009, the total annual salary sacrifice contributions you make will be included in the definition of total annual income. This may affect your eligibility for some means-tested benefits such as the Government co-contribution, some tax deductions and tax offsets.