A smart way to package your pay

Recent changes to tax rates and superannuation laws have led more people to consider salary sacrifice. After all, why should you pay 30% tax or more for each dollar you earn if you can pay just 15%?

For example every dollar you earn between $37,001 and $80,000 is taxed at 30% before it goes into your pocket. In comparison, every dollar salary sacrificed and paid into superannuation is taxed 15%.

In real terms, this means that $100 in gross income becomes $70 in your pocket or $85 in your super.

The following table shows the differing tax rates (2011/12):

If my taxable income is The tax rate on this income
if paid into my pocket is: 		Or the tax rate when this income
is sacrificed into super is
$37,001 - $80,000 30% 15%
$80,001 - $180,000 37% 15%
$180,000+ 45% 15%

As you can see, salary sacrifice can reduce tax and boost your super. If you are interested in salary sacrificing to boost your super, you need to arrange it through your employer.

To find out more about your salary sacrifice options click to download our short guide