Saving into super can be a tax effective way to save for retirement. Investment earnings on contributions are only taxed at 15% and making salary sacrifice contributions could reduce PAYG (income) tax.
You should seek licensed or authorised financial advice and do your own calculations to determine whether or not making salary sacrifice contributions is right for you.
What are salary sacrifice contributions?
Contributions made by entering an arrangement with youremployer where you agree to reduce your future gross salary and replace it with employer contributions to your super.
Download the form
Click herePDF 105kb to download the form Contributions by payroll deduction (FSS 010)
Some things to consider about salary sacrifice contributions
Your PAYG (income) tax may be reduced but your net contribution is smaller
Not all employers offer salary sacrifice – ask your employer if it is available
What’s the difference between after tax and salary sacrifice contributions?
After tax
Salary sacrifice
Making these contributions does not reduce your gross income for PAYG (income) tax purposes
Making these contributions reduces your gross income for PAYG (income) tax purposes
Taxed in the fund as follows:
No contributions tax when allocated to your account
15% contributions tax when allocated to your account
31.5% additional “no TFN” tax if your TFN is not held by the fund
31.5% additional tax on any contributions which exceed the concessional cap
And potentially taxed on leaving the fund if cashed out before age 60, click here
Your fund must have your tax file number to accept the contributions
If your fund does not have your tax file number (TFN) it will accept the contribution but the “no TFN” tax will be applied
Qualify for the Federal Government's co-contribution if you earn less than $60,342 pa in 2008/09 (other conditions apply) click here for more information
Do not qualify for the Federal Government's co-contribution, regardless how much you earn
The information on this website contains general information and does not take into account your personal objectives, financial situation or needs. It is important, before deciding whether to become a member of First State Super (or, if you are already a member, to continue your membership) that you consider the First State Super Product Disclosure Statement having regard to you own situation.
