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.
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 2016/17, the concessional contributions cap is $30,000 (or $35,000 if you are aged 50 or older at any point during the financial year). Learn more about contribution caps.
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.