Salary sacrifice is an arrangement between you and your employees which enables them to contribute part of their before-tax income into their superannuation account to gain tax benefits.
Salary sacrifice superannuation contributions are paid before PAYG tax is deducted from employees’ salaries. Salary sacrifice contributions are therefore treated like employer contributions and a tax rate of 15% is applied in the superannuation fund (unless the superannuation fund does not hold the employee’s TFN, in which case the tax rate is higher).
Not all employers offer their employee’s a salary sacrifice arrangement.
For more information about salary sacrifice arrangements and your responsibility as an employer visit the ATO website.