Salary Sacrifice

The benefits of salary sacrifice are:

• The total amount of tax you pay may be reduced. The personal income tax you pay will be based on the reduced amount of salary (after the salary sacrifice) and taxed at your marginal tax rate which could be 37% plus medicare. The value of your super contribution will be subject to contributions tax of 15% (increasing to 30% for those with income and concessional contributions totalling more than $250,000), which will be deducted from your super contribution.
• You are investing money in a more tax effective environment. You have the choice to invest inside or outside of super. The tax rate inside super is a maximum of 15%, which may be lower than other investment options outside of super which will be taxed at your personal tax rates.
• You are putting more money away for retirement. It can form part of your retirement savings plan.