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Salary sacrifice

Contributions from your employer alone may not be enough to fund your dream retirement. Salary sacrifice is a simple way you can add to your super and help it grow faster - it also has some great tax benefits!

So what exactly is salary sacrifice?

Salary sacrifice is when your employer pays some of your salary into your super account instead of your take-home pay. So, what are the benefits?

  • It reduces taxable income
  • The tax rate on contributions may be lower than your marginal income tax rate.

I'm interested... what next?

Step 1 - Use our calculator

Before you commit to salary sacrifice, you can see how it could work for you, by using our contributions calculator.

Step 2 - Make it happen

Ask your employer to arrange to have extra contributions made to your Sunsuper account via salary sacrifice. They can usually make the arrangement on your behalf. You can use this email template to let them know. If you aren’t able to salary sacrifice, you can still make before-tax super contributions by making voluntary contribution from your after-tax pay, and then claiming a tax deduction.

Work Test

If you are aged between 65 and 74, you need to complete a Work Test declaration. You can complete the declaration online or print and complete the Work Test declaration form [PDF93KB]

Contribution caps

It's worth noting that there is a cap which limits the amount of before-tax contributions that can be made and any super contributed over the cap amount is subject to extra tax. For 2017/18, the concessional contributions cap is $25,000. Learn more about contribution caps.

Important Information

It's advisable that you and your employer clearly state and agree on all the terms of any salary sacrifice arrangement. The contract is usually in writing, but may be a verbal one.

If you enter into an undocumented salary sacrifice arrangement, you may have difficulty establishing the facts of your arrangement.

If you have a contract of employment, you and your employer may need to review the terms and conditions of your contract to ensure the arrangement of your salary sacrifice is effective. 

If you are unable to negotiate a satisfactory salary sacrifice arrangement with your employer, you may wish to consider making voluntary after tax contributions and claiming a tax deduction.