Salary sacrifice to your super

When it comes to salary sacrificing, or salary packaging, the main things to think about are your budget and your income level.

You need to make sure you have enough left in your take-home pay if you salary sacrificed. There's no point saving extra for the future if you leave yourself short today.

If you're a low-income earner, you might not get the tax benefits. Instead, you might think about making after-tax contributions. You could also get the government's super co-contribution if you meet the rules.

Another option is to make a voluntary after-tax contribution to your super and then claim a tax deduction.

Use a salary sacrifice calculator to check if it's worth it for you. Or you can get financial advice about your super as part of your membership.²

Salary sacrificing can be very tax-effective, but it's not right for everyone.

1. The amount you can add to your super each year is capped. You'll pay more tax if you go above the limits.
2. You can't claim a tax deduction on salary sacrificed contributions to your super. That's because you didn't pay any income tax on them.
3. You'll still have less take-home pay by salary sacrificing. So you'll need to make sure it fits in with your budget.

You can add up to $30,000 to your super before tax in 2024–25. It's called the super contributions cap. On top of this (and if you're eligible), you can add any unused amounts from your concessional caps from the previous 5 years (the carry forward rule).

The cap includes both your salary sacrifice and the super your employer has to pay you.

If you go above this limit, you'll pay your marginal tax rate (minus a 15% tax offset) on extra contributions.

You can generally salary sacrifice any type of benefit. But your employer has to agree to let this form part of your pay package.

Depending on the industry you work in, salary sacrifice agreements with employers can sometimes include:

• Fringe benefits – e.g. car, mortgage, rent, school fees, childcare fees
• Exempt benefits – e.g. mobile phone, computer software, protective clothing, or tools of trade
• Superannuation contributions.

Ask your employer about what they can let you salary sacrifice.

Just about anyone can salary sacrifice to super. But if you're a low-income earner, you might not get the tax benefits.

It does depend on where you work. Most employers offer super salary sacrifice to their people. Although they might not let you salary package other benefits.

Think about getting personal financial advice to work out if salary sacrifice is right for you. Or use tools like salary sacrifice super calculators to do the sums yourself.

Yes, you pay 15% tax on money that you pay into your super. Or if your income plus before-tax contributions is more than $250,000, an extra 15% tax may apply.

But because you're taking that money out of your before-tax pay, you don't pay your normal tax rate on it.

If you made after-tax contributions to your super instead (also called personal or voluntary contributions), you don't pay the 15% super tax. That's unless you claim a tax deduction for it.

Salary sacrificing to super and salary packaging super are the same thing.

So you can ask your employer or salary package provider how to set up either salary sacrifice or salary packaging to your super, and they'll know what you mean.

There are other ways to give your super a boost:

• Add extra to your super after tax
• Find lost super
• Combine your accounts to avoid multiple fees
• Make spouse contributions
• Get the government super co-contribution