Tips for setting up salary sacrifice for superannuation
Super contribution limits
A salary sacrifice arrangement may affect your existing salary-based entitlements.
Limits on contributions to super
There are limits to the amount you can contribute to your super. Your ability to make extra contributions may also be restricted by your age and how much you've already saved in super (your total super balance).
The table below shows the limit on before-tax contributions and includes both your normal super payments, plus your additional salary sacrificed amounts and any personal contributions you claim a tax deduction for.
||Limit for before-tax (concessional) contributions
|Up to $27,500 a year
|67 to 74
|Up to $27,500 a year if you meet the work test
||You cannot make extra contributions
These limits apply for the 2021/22 year. Amounts above the caps trigger additional tax. Before-tax contributions above the cap that are not withdrawn will count towards your after-tax contributions cap.
Keep track of your total super balance
Your total super balance (across all super accounts you hold including income streams) can impact your ability to make or receive certain contributions and the tax rates that apply.
Once your total super balance reaches $1.7 million* the tax rates on contributions increase and you won’t be able to receive the Government co-contribution or tax offsets for spouse contributions.
* Limit for the 2021/22 financial year. Some amounts are excluded from the calculation of the balance (e.g. personal injury compensation amounts that qualify as structured settlements). Contact us for more information.
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.