Salary sacrificing involves a request by you to your employer to make a super contribution from your pre-tax salary.
Whatever your age or stage of work, making salary sacrifice contributions can be a tax-effective way to top up your super and it could also reduce the income tax you pay.
Investment earnings in super are taxed at a maximum of 15%. If you invest outside super, the earnings would be taxed at your personal income tax rate (up to a maximum of 46.5%). This tax reduction means you have a larger amount to invest, which can make a big difference over time. Although you pay contributions tax on the money going into the super fund, a lower gross salary could mean you pay less income tax.
We can help you structure a salary package with your employer and incorporate salary sacrifice into your superannuation and retirement planning strategy.
When you get closer to retirement, you could take advantage of a transition to retirement strategy, which makes it possible to access some of your super in the form of a pre-retirement pension while you are still working. If you have reached your ‘preservation age’ (which varies, starting at age 55 if you were born before 1 July 1960) and are still working, we can show you how you could salary sacrifice into your super while simultaneously drawing a pre-retirement pension. This tax-effective strategy could help increase your retirement savings.
To find out how a salary sacrifice strategy could work for you, call 08 9393 3770 or email us.
Information in this web page is based on regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Matrix Planning Solutions Pty Ltd, its related entities, agents and employees for any loss arising from reliance on this document.
This web page may contain general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.