Salary sacrifice
Salary sacrificing contributions is where your employer agrees to pay a certain amount of money into your super from your before-tax pay instead of paying that amount to you as salary. Salary sacrifice isn’t always the best option, and there are advantages and disadvantages to contributing this way.
Advantages
- You don’t pay income tax on your super contributions as they are coming out of your before-tax salary.
- You will generally pay less income tax and your take-home pay will increase.
- You can salary sacrifice standard member contributions and extra contributions, if your employer will allow it.
Disadvantages
- You will have less going into your super unless you pay in extra amounts to offset the 15 % contributions tax deducted on the way into superannuation.
- Salary sacrificed amounts are not eligible to receive the super co-contribution from the Australian Government.
Making your decision
LGsuper’s knowledgeable staff can help you decide whether salary sacrifice is right for you. Contact us to discuss your situation and we can show you the affect salary sacrificing could have on your salary and superannuation benefit.
If you would like to salary sacrifice, contact your HR area to find out if it is possible and if so, how to get started.
