What is salary sacrificing?
Salary sacrificing involves paying some of your before-tax salary (that’s your income before any income tax has been calculated or deducted) straight into your super account.
Not only can it boost your super balance, but it can also potentially reduce your tax rate.
That’s because the money is directed into your super before you’ve paid income tax on that portion of your salary. Once in your super account it’s taxed at just 15%*, which is likely to be lower than the marginal tax rate that would have applied otherwise.
* If your income plus your super contributions exceed $250,000 you’re taxed at an additional 15% on either your contributions or the amount that’s over $250,000, (whichever is lower).
Check with your employer
Salary sacrifice contributions need to be arranged with your employer, and not all employers offer this feature. You’ll need to check with your employer first to see if they can accommodate salary sacrifice arrangements.