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Salary sacrifice contributions are made from your before-tax (pre-tax) income, which reduces your income level and therefore the amount of income tax that you would normally have to pay. By electing to put some of your before-tax salary into your superannuation account, you could:
Salary sacrifice is a type of concessional (before-tax) contribution, which is made before income tax is calculated on your salary.
Instead of being taxed at your marginal rate, salary sacrificed contributions will generally be taxed at 15% when they are paid into a super fund provided you don’t exceed the contributions cap limit. As a general rule, the higher your marginal tax rate, the more you can benefit from salary sacrificing.
However, there may be little or no benefit in salary sacrificing if you are on a low income. The tax benefits will depend on how much you earn and how much you already contribute to your super.
To prevent high income earners from using salary sacrificing as a way to avoid their marginal rate, there is a limit on the amount you can contribute each year.
*Limit does not include the Government co-contribution.*Limit includes the 9.5% compulsory super contribution paid by your employer
If you do make concessional contributions to super above the annual limit, the excess will be added to your assessable income and will be taxed at your marginal tax rate. You will receive an offset for the 15% contributions tax already paid.
You will have the choice of withdrawing up to 85% of the excess contribution. As you will have already been taxed on this amount at your marginal tax rate, no further tax is payable on any withdrawal.
Note that contributions above the before-tax limit will also count toward your after-tax (non-concessional) limit.
Superannuation is one of the most tax-effective ways to invest your savings. Salary sacrificing to super reduces your taxable income, and the earnings on your investments are taxed at a low rate too.
Use our salary sacrifice calculator and enter your income details to see how much you can contribute and how much you could be saving!
Important: you should verify with your employer that your salary sacrifice agreement is in addition to the compulsory Superannuation Guarantee (SG), which is 9.5% of your salary.
Salary sacrifice arrangements are not available to everyone and not all employers offer the option, so it's best to check with your employer to see if this is a possibility.
Salary sacrifice isn't necessarily right for all circumstances and we recommend that you seek professional advice before making a decision. Australian Catholic Superannuation offers two appointment-based advice services: over-the-phone and face-to-face.
After discussing with your employer to confirm that they can accommodate salary sacrifice, complete a salary sacrifice form and hand it directly to your payroll department. Your employer will notify Australian Catholic Superannuation of the contribution amount when making your superannuation payments.
If you are work for a Catholic employer in Queensland, then you may be eligible for an employer bonus contribution!
If you make additional contributions to your super, your Catholic employer can offer a generous contribution on top of the 9.5% they already give. However, the extra amount paid depends on your own contribution level.
Enquire with your payroll office to confirm they offer this bonus incentive.
Salary sacrifice (voluntary pre-tax) contributions(PDF 235KB)
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