Before tax contributions (salary sacrifice)
Salary sacrifice to your super. By adding to super from your before-tax salary, you could reduce your taxable income and reduce your tax bill, while growing your retirement savings. Take a look at the benefits, caps and how to salary sacrifice.
What is salary sacrifice?
Why pay 32.5% tax or more for each dollar you earn if you only need pay 15%?
Every dollar you earn between $37,001 and $90,000 is taxed at 32.5%. However, every dollar salary sacrificed into your superannuation account is taxed at just 15%. That means every $100 in gross income becomes $67.50 in your pocket or $85 in your super.
* Marginal Tax Rate of 32.5% (taxable income $37,001 - $90,000)
Compare the tax rates for 2018/19:
|Taxable Income||Income |
|Salary sacrifice |
|$37,001 - $90,000||32.5%||15%|
|$90,001 - $180,000||37%||15%|
|$180,001 - $250,000||45%||15%|
How to set up salary sacrifice
When deciding whether to salary sacrifice we recommend you visit the ASIC MoneySmart Super Contributions Calculator to check which type of super contribution will give you super the biggest boost. If salary sacrifice is right for you simply speak to your employer who can direct some of your pay into your super.
For more information, download our brochure:Salary sacrifice (305.22 KB)