How can I make extra contributions?
1. Salary sacrifice for super
Salary sacrifice is an easy way to make extra payments into your super account. It’s also called a concessional contribution. It’s generally worthwhile considering if your income is over $37,000.
Your employer agrees to redirect a portion of your before-tax salary into your super account. You can set and forget, and enjoy the benefits of putting more into your super.
The benefits of salary sacrifice
Lower tax rate
When super is paid from your pre-tax salary, your taxable income is lowered. And the higher your tax bracket, the less tax you pay on the money that’s salary sacrificed to super.
The tax saving you may receive is the difference between your marginal tax rate plus the Medicare levy and the Budget Repair levy (a total of up to 49%) and the super tax rate (which is 15%).
Over time, you’ll enjoy the benefit of compounding returns in your super fund. And as your account grows over time you’ll see how even a little extra contribution now, can mean a lot to your savings at retirement.
How can I set up a salary sacrifice?
Salary sacrifice is an agreement between you and your employer.
Simply print and complete our Salary sacrifice form (PDF) and submit it to your employer.
Tips for setting up salary sacrifice for superannuation
Super contribution limits
A salary sacrifice arrangement may affect your existing salary-based entitlements. Employers may base their super contributions on your reduced salary amount. It’s a good idea to check first, before deciding to salary sacrifice.
Limits on contributions to super
There are limits to the amount you can contribute into your super account.
This maximum limit includes both your normal super payments, plus your additional salary sacrificed amounts. These are your concessional contributions limits*.
||30 June 2015
||30 June 2015
*All concessional contributions that exceed the limit will be taxed at your marginal income tax rate, payable by you. If you contribute over the limit you can withdraw excess contributions.
Since your contributions are made by your employer, you can’t claim a tax deduction for any sacrificed amount.
Salary sacrificed amounts are included as reportable super contributions that count toward certain income tests used for working out benefits, concessions and offsets.
FRINGE BENEFITS TAX
A salary sacrifice contribution is not a fringe benefit, so it’s not subject to fringe benefits tax. It shouldn’t be reported on your PAYG payment summary.