What is salary sacrifice?
Salary sacrifice is an arrangement where part of your pre-tax salary goes to super or benefits instead of your bank account.
Salary sacrifice (also called salary packaging) is when you agree with your employer to receive less take-home pay in exchange for benefits paid from your pre-tax salary. The most common form is extra super contributions, but it can also cover things like a novated car lease or laptops.
The advantage is tax savings. Extra super contributions via salary sacrifice are taxed at 15% in the fund, which is less than most people's marginal tax rate.
Key facts
- •Pre-tax contributions to super are taxed at 15% (or 30% if income exceeds $250,000)
- •Concessional super contributions cap is $30,000 per year (includes employer SG)
- •Can also be used for novated leases, laptops, and other benefits
- •Reduces your taxable income and may affect government benefits
- •Must be arranged before the income is earned — can't salary sacrifice retrospectively
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Salary Sacrifice CalculatorFrequently asked questions
How much can I salary sacrifice into super?
Up to the $30,000 concessional contributions cap per year, including your employer's SG contributions. If you go over the cap, the excess is added to your taxable income and taxed at your marginal rate plus an interest charge.
Does salary sacrifice reduce my super guarantee?
It depends on your agreement. Some employers calculate SG on your pre-sacrifice salary, others on your reduced salary. Check with your employer.
General information and estimates only — not financial, tax, or legal advice. Always verify with a licensed adviser or the ATO.